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FOREWORD 


Public interest is centered on the railroads, and the financial 
pages of the newspapers and periodicals are filled with the traflSc 
and operating statistics and financial returns of the railroads 
individually and as a whole. Consolidations of large systems are 
under way and further developments along these lines seem to be 
assured by the provisions of the Transportation Act of 1920 and 
the attitude of the government. 

With the increasing magnitude of railroad operations, the rail- 
road executives are forced to depend more and more on the 
accounts and statistics for an accurate picture of the various 
activities on the lines under their jurisdiction. Happily the 
standardization of the accounts and statistics on the railroads of 
the United States under the general supervision of the Interstate 
Commerce Commission has progressed to such an extent that the 
operating results on a railroad can be analyzed with reasonable 
accuracy and completeness both by comparison with previous 
performances on that railroad and by comparison with the per* , 
formances on other railroads disrating under similar conditions. 

In making these comparisons, the analyst as a rule is safe in 
assuming that the accounting has followed strictly the mles laid 
down by the Interstate Commerce Commission in the various 
accounting classifications which it has issued. Familiarity with 
" these classifications, maker it~pdssiSe''fof thcnrailr^^ mati or . 
student of railroad operations to interpret the accounting and 
statistical statements prepared by the accounting department and 
analyze for himself the operating results on the railroad even 
though he is not familiar with die technical details of railway, 
accounting procedure. 

; This book desds primarily with the interpretation rather than 
/^ith the preparation of the accounts and statistics. It is the. 
author’s hope ! to a study of the following pages will not only 



iv 


Foreword 


make tlK vast fund of infonnation contained in the accounting 
records and statistics more available to railroad men and other 
students of railroad operations without accounting training, but 
will also give railroad accountants a clearer idea of the operating 
man’s point of view and the use that can be made of the ^ures 
prepared by the accounting department. 

The autto wishes to take this opportunity of expressing his 
great appreciation of the valuable comments and suggestions which 
he has received during the preparation of this book from Professor 
William J. Cunningham, James J. Hill Professor of Transporta- 
tion at the Harvard Graduate School of Business Administration, 
from Mr, E, R. Woodson, Secretary of the Railway Accounting 
Officers Association and from Mr. C. W. Foss, Financial Editor 
of the Railway Age. 

J. L. White. 

New York Qty, 

July. 1925. 



CONTENTS 


CHAPTER I 

iNTRODUCnON 1 

Purpose of book>-analysis of railroad operations through accounts 

and statistics » . . . 1 

General character of railroad operations 2 

Methods of analyzing operating results on a railroad 3 

Knowledge of the character of items included in revenue and ex- 
pense accounts must precede analysis of fluctuations ... 3 

CHAPTER II 

The Income Statement 5 

General system of accounts prescribed by the Interstate Commerce 

Commission 5 

Income accounts * S 

Income statement 5 

Profit and loss accounts 6 

Balance sheet accounts . 7 

Accrued accounting . 1 

Net income arid net rafiway operating income . . . . • • • 8 

Net revenue from railway operations and operating ratio ... U 

Railway operating income 11 

CHAPTER HI 

Railway Operattno Revenues ............ 12 

General operating revenue accounts 12 

Transportation— rail line— primary revenue accounts . . . . . 12 

- Freight service . . . . . . . , . . . 14 

Passenger and allied services 

Passenger— excess baggage— sleeping and parlor car service, 
railway mail service, railway express service, table of reve- 
nues by primary accounts ; . . . . , . i • . 0 i IS ' ; 

Transportation— water line .....; 17 

Incidental revenues . . . . .. . . , ... . . . » 18 

Joint facility rev^ues . . . ... . , , .... . , 19 

Relative importance of various operating rev^ue accot^s . w . 19 

: Claswfication of operating revalues and operating ^ixpenses or . 



Contents 


f 

vi 

CHAPTER IV 

PAGE 

Statistics of Freight and Passenger Service 21 

Basis of freight rates 21 

Statistics of freight service—revenue tons carried 21 

Classification of revenue tons carried by commodities 22 

Revenue ton miles 23 

Distance tariff 25 

Average revenue per ton, revenue per ton mile and distance carried 26 

The way bill 27 

Non-revenue freight 28 

Passenger service— character of service and basis of rates ... 29 

Statistics of passenger traffic 30 

Statistics of "allied” services 31 

CHAPTER V 

Analysis op Fluctuations in Railway Operating Revenues . . 32 

Analysis of fluctuations in account 101, "Freight” 32 

Table showing typical figures and methods of analyzing fluctua- 
tions 33 

Formula for combining percentages of change 34 

Causes of fluctuations in the average revenue per ton mile ... 35 

Analysis of fluctuations in Account 102, "Passenger” — separation of 
passenger revenue and passenger miles between classes of pas- 
senger traffic 36 

Train mile earnings 37 

Revenue per freight train mile— causes of fluctuations— table show- 
ing typical figures and method of analysis 37 

Revenue per passenger train mile— causes of fluctuations— table 
showing typical figures and method of analysis 38 

CHAPTER VI 

Railway Operating Expenses 41 

Gassification of operating expenses 41 

General operating expense accounts 42 

Maintenance expenses — maintenance of way and structures and 

maintenance of equipment . . 43 

Distinction between maintenance and additions and betterments . . , 43 

Distinction between maintenance and operation . . . , . . . / 44 

Operation— transpoftationr— rail line and water line, and miscella- 
neous operations . . . , . . . . , . : 4S 

Other cxpenses^traffiq e^ensesr-^g^er^ expenses— tr^sportation 
ior\investmetti--KSt^ .. “'45 



Contents 






Vll 


VAGB 

General character of items included in expenses— labor, material, 
miscellaneous expense— depreciation and retirements. . . . 
Purpose of primary expense accpunts 


CHAPTER VII 

Analysis of Fluctuations in Railway Operating Expenses . . 
Comparison of analysis of fluctuations in revenues and of fluctua- 
tions in expenses 

Relation between revenues and expenses 

The operating ratio — an index of the cost of producing revenue— 

not of operating efficiency 

Analysis of fluctuations in the ratio of train expenses to revenues . 
Separation of expenses between freight and passenger service . . 

CHAPTER VIII 

Analysis of Fluctuations in Maintenance of Way and Struc- 
tures Expenses 

Grouping of primary expense accounts according to cause and char- 
ter of expense, viz., repairs, depreciation, supervision and mis- 
cellaneous, and joint facilities 

Summary of expenses of each group 

Character of expense and causes of fluctuations in depreciation- 
supervision and miscellaneous— equalization of expenses— joint 

facility accounts 

Division of repair accounts as between labor, material, miscel- 
laneous ^pense and retirements and explanation of each . , 
Causes of fluctuations in labor and material expense— changes in 
rates of pay or prices of material— changes in number of hours 
worked and quantities of material applied, . • v * •, 

Methods of dividing fluctuations between these two general causes 
Use of equation factors— development and application , . . . 
Formula for ^alyzing mcreases or decreases in labor and material 


expense . . . . , . .... . 70 

Comparison of fluctuations in hours worked and amount of repair 
work performed 70 


CHAPTER IX 


Unit Costs of Maintaining Fixed Property . . 73 

Basis of unit costs— units of service performed and units reflecting 
the activities of the departments . . . . ♦ .. . . . 73 


Units reflecting the activities of the maintenance; of way depart- 
ment— requirements for repair work (units of property main- , 
tained) and work actually performed (material applied) ; . . 74 


s s ss s asa sa a *6#: 



c 

viii Contents 

VA68 

Significance of fluctuations in unit costs based on requirements for 
repairs and actual work performed ......... 7S 

The development of unit costs of property maintained .... 77 

Distinction between miles of road, miles of main track, miles of all 

track 77 

Distinction between miles of track operated and maintained ... 78 

Equation of miles of track maintained to reflect different require- 
ments for maintaining first main track, additional main track 

and yard tracks and sidings . 79 

Effect of use of property on repairs 80 

The development of unit costs based on work actually performed . 81 

CHAPTER X 

Analysis of Fluctuahons in Maintenance of Equipment Ex- 
penses 83 

Course of analysis similar to that followed for maintenance of way 

and structures 83 

Grouping of primary expense accounts according to the cause and 
character of the expense, namely: 

Equipment repairs — depreciation-retirements 
Shop and power plant machinery repairs — depreciation- 
supervision and miscellaneous— joint facility accounts ... 83 

Character of expense and causes of fluctuations in depreciation and . 
retirements; shop and power plant machinery repairs and de- 
preciation ; supervision and miscellaneous ; joint facility accounts 84 
Division of equipment repairs between labor, material and miscel- 
laneous expenses — explanation of shop expense and freight car 

repair bills . . 87 

Methods of analyzing fluctuations in labor and material expense . 89 

Comparison of fluctuations in manhours and work performed . . 89 

Classification of car and locomotive repairs 90 

CHAPTER XI 

Analysis of Account 314— Freight Train Cars— Repairs ... 92 

Division of Account 314 between repairs to owned cars and repairs 

to foreign cars ; and sub-division of each item 92 

Characters of items included in repairs to owned cars .... 93 

Character of items included in repairs to foreign cars — ^billable de- 
fects; non-billable or user’s defects . , . 95 

Example of use of equation factors in analyzing causes of fluctua- 
tions in Account 314, “Freight train cars— repairs” . . . . 97 

CHAPTER XU 

Unit Costs of Maintaining Equipment, , . 99 

Development of unit costs based on requirements for equipment 
maintenance . . . . . . , , , , , , . . 99 



Contents 


ix 

PAGE 

Units of requirements for repairs based on use made of equipment 
—car miles and locomotive ton miles ; run out mileage between 


classified repairs 99 

Availability of car mileage statistics 101 

Floating equipment repair costs 101 

Work equipment repair costs .101 


Effect of deferred maintenance on unit costs based on requirements 102 
Development of unit costs based on actual work performed . . 102 


CHAPTER XIII 

Analysis of Fluctuations in Transportation Expenses ... 104 

Character of expense included in transportation 104 

Labor 104 

Material and supplies 104 

Miscellaneous expense— claims for loss and damage to property and 

injuries to persons .105 

Grouping of primary expense accounts according to the cause and 

character of the expense 105 

Train and locomotive operation 106 

Operation of stations and other facilities 107 

Supervision and miscellaneous . , . 107 

Joint facility accounts . . .107 

Method of analyzing fluctuations in transportation expenses , 107 

Other expenses of operation; transportation— water line; miscel- . 
laneous operations 109 


CHAPTER XIV 

Statistics OF Operation Used AS Bases FOR Unit Costs * • v * 
Distinction between the activities of the maintenance and transporta- 
tion departments ................ 112 

Units which record the activities of the transportation department 113 
Statistics , of locomotive and train operation^Iocomotive miles, train 
miles and car miles . . . . ... . . . . . . . 114 

Conductor's train report . . , . . . . . , . . . . . 115 

Unit costs of yard locomotive operation ... . , . . • * • 

Division of expenses of train operation between freight mid pas- , 
sehger; 'r * W 

Unit costs of freight train operation , . . . . . . . . , 

Statistics and unit costs of fuel performance . . , . . 121 

Formula for dividing fluctuations m cost of fuel between pric*^ y 
; tonnage haiidled and rate of consumption . * • 

/ Unit costs :ot passenger train operation; ,. . . . , . .vr . : 124 




X 


Contents 


CHAPTER XV 

PAGB 

Analysis of Fluctuations in the Revenue Train Load in Freight 

Service 125 

Significance of the revenue train load 125 

Revenue train load in freight service 126 

Train load of all freight— net train load 126 

Principal elements affecting net train load 

Gross ton miles, train miles, net ton miles 126 

Relation between gross ton miles, train miles and net ton miles 

Ratio of net to gross ton miles 127 

Typical analysis of fluctuations in revenue train load .... 129 
Gross ton miles per train hour as an index of operating efficiency . 131 

CHAPTER XVI 

Analysis of Fluctuations in Traffic and General Expenses 

Taxes and Rents 133 

Primary accounts included in traffic and general expenses . . . 133 

Taxes and rents 134 

Railway tax accruals 135 

Uncollectible railway revenues 136 

Equipment rents 136 

Hire of freight cars 137 

Joint facility rents . 138 

Outside income . . 139 

Fixed charges 140 

CHAPTER XVII 

Analysis of Railroad Operations Based on Data in Annual 

Report to the Interstate Commerce Commission 141 

Annual Reports to the Interstate Commerce Commission and the 

stockholders 141 

Analysis of fluctuations in revenues 143 

Analysis of fluctuations in expenses ; 143 

Maintenance of way and structures — separation of repair accounts 
between labor, material, miscellaneous expense and retirements 

not available 143 

Unit costs based on miles of track maintained 144 

Steps in analysis of maintenance of way and structures .... 144 
Maintenance of equipment 

Situation similar to maintenance of way and structures in s^ara- 
tion of repair accounts between labor, material and miscel- 
laneous . 145 

Steps in analysis of maintenance of equipment . - . . • ,. • 145 



Contents 


xi 


APPENDICES 

PAGtt 

147 


147 

147 

148 

149 


ISO 


152 


154 


Table 4 • . . . 156 

Railway operating expenses by primary accounts. 

Table 5 161 

Maintenance of way and structures. Rearrangement of pri- 
mary accounts in accordance with the cause and character of. 
the expense. 

Table 6 165 

Maintenance of equipment. Rearrangement of primary ac- 
counts in accordance with the cause and character of the 
expense. 

Table 7 167 

Transportation — rail line. Rearrangement of primary accounts 
in accordance with the cause and character of the expense. 

Appendix 

Qassification of operating revenues and operating expenses of steam 
roads, prescribed by the Interstate Commerce Commission effective 
July 1, 1914, with supplements and amendments thereto. 

Appendix C • 290 

Qassification of income, profit and loss and general balance sheet 
accounts of steam roads, prescribed by the Interstate Commerce 


Commission effective July, 1914, with supplements and amendments 
thereto. 


Unit costs — locomotives— freight cars—passenger train cars . . . 

Transportation expenses 

Information more complete than for maintenance expenses, par- 
ticularly for locomotive and train operation 

Steps in analysis of transportation expenses 

Analysis of traffic and general expenses, taxes and rents . . . . 

Appendix A 

Income statement and revenues and expenses of Qass 1 railroads in 
1923, taken from the preliminary abstract of statistics of Class 1 
carriers for the year ended December 31, 1923, issued by the Inter- 
state Commerce Commission. 

Table 1 

Income statement as reported by the Interstate Commerce 
Commission. 

Table 2 

Income statement rearranged to show accounts included in net 
railway operating income. 

Table 3 

Railway operating revenues by primary accounts. 



Contents 


PAGB 

Appendix D 353 

Classification o£ train miles, locomotive miles and car miles for 
steam roads, prescribed by the Interstate Commerce Commission 
effective July 1, 1914. 

Appendix E 367 

List of schedules included in annual reports of Class I and Qass II 
railroads to the Interstate Commerce Commission in the order in 
which they appear in the report 

Appendix F 370 

Freight waybill. 

Appendix G 372 

Conductor’s train report. 




INTRODUCTION 

Purpose of the Book.— The purpose of this book is to review 
the system of accounts and statistics established on the railroads 
of the United States by the Interstate Commerce Commission, and 
to outline the methods by which these accounts and statistics may 
be used to analyze the activities of a railroad and the results 
obtained from its operations. 

It is not the purpose of the author to discuss the technicalities 
of railway accounting procedure. That subject is thoroughly 
covered in the official publication of ffie Bailway Accounting 
Officers Association entitled "Railway Accounting Procedure,” 
edited by E. R. Woodscm, Secretary of the Association. The 
approach to the subject is from the point of view of the operating ' 
officer or his statistician, who is interested in the interpretation 
of the voluminous accounting and statistical statements prepared 
by the accounting department, covering the current or past opera- 
tions of the railroad. Do these hg^s indicate an improvement in 
operating results, or the reverse, and why? ■ 

While accounting experience is of cour% very helpful in rmswer- 
ing these questions the lack of it should not discourage the 
would-be analyst in his attempt to solve these problems. The 
more important features of railroad accounting have been stand- 
ardized by the Interstate Conunerce Commission ^d the account- 
ing classifications issued by the Conuuission are as a rule dear 
to how revenues and expenses shall be classified and recorded in 
the accounts. A careful study of these classifications, therefore, 
should enable every railroad man or student of railroad operations 
to. analyze for himself the operations of a railroad, a whole as 
. well as the results obtained by the. divisions dr departments in 
, which he is interested.. 

, in. order tiud the reader who is not familiar with these riassifi- 
catiohs: msQr ..haW'te at -hand for; twidy 




2 


Analysis of Railroad Operations 

those relating particularly to the revenues, expenses and statistics 
of operation are given in the Appendix. These classifications will 
be discussed at length in the following chapters and reference will 
be made to the pages in the Appendix, where the particular ac- 
counts under discussion will be found. The reader is urged to 
study these classifications in detail because the more familiar he 
is with the character of the items included in each account, the 
easier will he find the interpretation of these accounts in the terms 
of the physical activities of the railroad. 

^ General Character of Railroad Operations. — Before taking 
up the detailed study of the accounts and statistics let us review 
briefly the general character of a railroad’s operations and the 
sources of its revenues and expenses. 

A railroad is built primarily for the purpose of transporting 
passengers and freight and derives its principal revenues from this 
service. It also receives revenues for the transportation of mail 
and express and for performing other services incidental to the 
general business of transportation. These revenues derived direttly 
or indirectly from transportation service are called ‘‘Railway 
Operating Revenues.” 

In addition to these revenues, a railroad frequently receives a 
substantial income from investments in the securities of other 
corporations and in property not used in the service of transporta- 
tion. This income is usually called “Outside Income.” 

The expenses of a railroad may also be divided into two general 
groups : 

First : the expenses of operating, maintaining, and administering 
the property and performing the various services for which the 
Railway Operating Revenues are received. These expenses are 
called “Railway Operating Expenses” and with them should be 
included taxes and the net rents paid or received for the use of 
joint facilities and equipment as hereinafter explained. 

Second: Interest on bonds, leases covering the exclusive use 
of property and similar items which have to be met before any 
profits can be returned to the owners. These items are usually : 
called “Fixed Charges.” 

Our chief interest lies in the railway operating revenues and 
expenses which record the regular daily activities on the railroad 



Introduction 


3 

and we shall therefore confine our detailed study to these accounts. 
In order, however, that the reader who is not familiar with rail- 
road accounting may have a general understanding of the relation 
of these accounts to “Outside Income” and “Fixed Charges,” 
and the position of all these items on the income statement we 
shdl review briefly the general s)ratem of accounts and the con- 
struction of the income statement before taking up the detailed 
study of the railway operating revenues and expenses. 

Methods of Analyzing Operating Results on a Railroad. — 
The analysis of operating results on a railroad for any given period 
usually consists of a comparison of the results obtained in that 
period with the results obtained in some previous period taken 
as a standard. For convenience we shall refer to these two periods 
as the “current” period and the “previous” period. In order to 
facilitate this comparison, it is customary for the accounting de- 
partment to insert on the statements of revenues and expenses for 
the current period, the corresponding items for the previous period 
and the increase or decrease for each item. 

The first step in an analysis is to study these increases and 
decreases and locate the items of revenue and expense in which 
die principal fluctuations have occurred. 

The second step is to determine the causes for these fluctuations. 

The methods of analyzing these fluctuations depend upon the 
kind of revenue or expense involved. , The importance of a dear 
understanding of the character Off the items induded in each 
revenue and exipense account is therefore apparent, and before 
taking up the methods of analyzing fluctuations in the various 
accounts, the character of the revenues and expenses included 
therein will be discussed in detail. 

Railroad operations are conducted on a large scale and the 
revenues and expenses of the principal railroad systems exceed 
$100,000,000 a year. It is, therefore, necessary for the analyst of 
railroad operations to become accustomed to dealing in large 
' figures and to fed as much at home among the millions as among 
the hundreds or thousands. 

To accomplish this result, it is necessary to summarize, wherever 
: po^ble/^d. thus ob^ a general view of tlw. “high s|^” of a ■ 
situatiph before beqomo^ involved .re a 



4 


Analysis of Railroad Operations 

detailed anal 3 rais. In order to bring out the importance of these 
summaries, the detailed statements of revenues and expenses of 
all the large railroads of the United States in 1923 which run 
into the billions are given in the Appendix, while brief summaries 
of the principal items are given in the text. 

Percentages of increase or decrease, ratios of expenses to 
revenues, average rates and unit costs are all important aids to 
the analyst in his dealings with large figures and are therefore 
discussed in detail in the following chapters. 

There are so many different elements entering into the railroad 
problem, that it is necessary for the analyst to draw his conclusions 
with great caution and get as many different angles on a situation 
as possible. This is particularly true in determining the efficiency 
of operations from unit costs, and it has therefore seemed ad- 
visable to emphasize the limitations of the various units in general 
use and point out how far they can be used with safety. 

The author wishes to emphasize again that his subject is not 
accounting procedure by which the various items of revenue 
and expense are recorded in the proper ^counts, but the interpre- 
tation of the accounting records as prepared by the accounting 
department in connection with the analysis of railroad operations. 



CHAPTER II 


THE INCOME STATEMENT 

General System of Accounts. — The accounts are records of 
the financial transactions of the railroads and are kept in ac- 
cordance with uniform rules laid down by the Interstate Com- 
merce Commission which apply to all railroads engaged in inter- . 
state commerce. These rules follow the recognized principles 
of commercial accounting and have been worked out in great 
detail to cover all phases of the financial transactions of a railroad. 
The accounts are divided into three general groups, as follows: 
Income Accounts 
Profit and Loss Accounts 
Balance Sheet Accounts 

ill accordance with the classification of income, profit and loss and 
general balance sheet accounts prescribed by the Interstate Com- 
merce Commission. 

Incoihe Accounts, — ^The income accounts record the earnings 
and expenses arising from the operation of the railroad, during 
a specific accounting period. The accounts which record the earn- 
ings are called ^‘Credits” and those which record the expenses are 
called “Debits.*^ These ‘'Credit’^ and ^‘Debit'^ accounts are classi- 
fied to show the sources of the earnings and the causes of the 
expenses. The principal credit account is called “Railway 
Operating Revenues” and the principal debit account “Railway 
Operating Expenses.” These two accounts are in turn subdivided 
into primary accounts in accordance with the classifi^tions of . 
operating revenues and operating expenses of steam roads prer 
scribed by the Interstate Commerce Commission, 

Income Statement,— The income accounts are summarised for 
the accounting period on a statement called the income account . 
\)r income statement for the jperiod. The difference betwieeh' the 
total credits debits represents the net profit otdpsSvfrpin 

the operations of the p^od and not 



6 


Analysis of, Railroad OperoHom 

customary, however, in published reports to list the debit accounts 
in one column and the credit accounts in another. Th^ form of 
statement required by the Interstate Commerce Commission in the 
annual reports of the railroads is given in Appendix A, Table 1. 

Following "net income” on the income statement but included 
in the income accounts under the classification are five accounts 
which record appropriations of net income for dividends, invest- 
ment in physical property, etc., before the balance from the income 
statement is transferred to profit and loss. As accounts are pro- 
vided under profit and loss for appropriations of surplus for simi- 
lar purposes, it is necessary to take into consideration the amounts 
recorded in both groups of accounts in arriving at the total appro- 
priations for these purposes during the period. 

Profit and Loss Accounts. — The profit and loss accounts 
record the net profit or loss from the operations of the period 
(net income) less appropriations thereof, as transferred from the 
income statement and the disposition which is made of this profit, 
if any, and other surplus, that is, how much is distributed to the 
owners (the stockholders) in the form of dividaids, and how 
much is put back into the property either temporarily or 
permanently. 

The profit and loss accounts also record any unusual property 
losses and adjustments not applicable to the income of the period. 
These accounts are divided into credit and debit accounts, similar 
to the credit and debit income accounts. The profits from opera- 
tion and miscellaneous credit adjustments are recorded in the 
credit accounts while the losses from operation, miscellaneous 
debit adjustments and appropriations (for dividends, investment 
in the property, or for other purposes), are recorded in the debit 
accounts. The balance in the profit and loss account at the be- 
ginning of the period is recorded in the credit accounts if a surplus, 
and in the debit accounts, if a deficit 

These credit and debit accotmts are summarized for the period 
on a statement called the profit and loss account, or. profit and 
loss statement for the period, the balance ipr difiEerencfe betw^ 
the total credits and totsd debits being c^ed the ^ofit and loss 
balance at the end of the paidd. As in the case pf net incothe, 
this balance may be a surplus or a d(^cit. : Tlds profit ani^ 



The Income Statement 




7 

balance at the end of the current accounting period is carried to 
the balance sheet and becomes also the profit and loss balance at the 
beginning of the next accounting period. 

Balance Sheet Accounts. — ^The balance sheet accounts record 
the changes in the financial resources and the financial obligations 
of the company during its existence. The resources of the com- 
pany are recorded in the debit or asset accounts and the obligations 
in the credit or liability accounts. 

The balance sheet is a summary of the balances in the asset 
and liability accounts at the end of an accounting period and 
reflects the financial condition of the company at that particular 
date. 

While it is not the purpose of this book to discuss the relation 
between income, profit and loss and balance sheet accounts and 
the accounting procedure by which current financial transactions 
are recorded on the balance sheet, a copy of the Classifications of 
Income, Profit and Loss and Balance Sheet Accounts is given in 
Appendix C, page 290, for the benefit of those readers who wish 
to study these accounts in greater detail. 

As pointed out in the introduction, our chief interest lies in 
those income accounts which record the railway operating revenues 
and railway operating expenses and the primary accounts into 
which they are divided in accordance with the classification of 
operating revenues and operating expenses of steam roads as 
prescribed by the Interstate Commerce Commission, A copy of 
this classification will be found on page 169 of the Appendix. 

Accrued Accounting. — ^The rules of the Interstate Commerce 
Commission provide that the income accounts shall be kept on an 
accrued basis. This means that instead of recording the actual 
cash receipts and expenditures during the accounting period, the 
credit accounts shall record as nearly as possible the amounts 
which the railroad is entitled to receive for services performed 
during the period, and the debit accounts shall record as n^rly 
as possible the amounts which the railroad is obligated to pay 
for expenses incurred during the period. The actual cash received . 
and paid by the treasurer during the period is not recorded in 
the inconje accounts and may differ widely from the .accrued 
' earning iand;;e3iLpenses^ , 



8 


Analysis of Railroad Operations 

While the accrued method of accounting is more complicated 
than a record of cash receipts and expenditures, it is the usual 
practice in commercial accounting and is absolutely essential for 
an intelligent study of the operating results on a railroad. 

Such a study requires a comparison of the revenues and ex- 
penses during an accounting period with the units of physical 
performance applicable to the same period, such as the tons of 
freight and number of passengers carried, and other transportation 
service rendered for which the revenues were received; and the 
number of trains run, locomotives and cars repaired, ties renewed 
and other items of work performed, for which the expenses were 
incurred. In order to make this comparison of any value, it is 
essential that revenues, expenses and units of physical performance 
shall all relate to the same period. To accomplish this result, the 
accounting must be on an, accrued instead of a cash basis. 

In this connection the method of accounting for material and 
supplies is a good example of accrued accounting. A railroad 
should always carry a sufficient supply of material and supplies 
on hand to avoid delays in operating or repairing the property. 
This necessitates carrying a stock of several months' supply/ The 
purchases of any particular kind of material during a period rarely 
coincide with the consumption of that material. For example, 
ties are frequently purchased in the winter and laid in the tracks 
during the spring and summer. Under the accrued method of 
accounting, these ties would not be included in the operating ex- 
penses of the winter months when purchased, but in the expenses 
of the spring or summer months when used in maintenance work. 

Net Income and Net Railway Operating Incpme. — ^Net in- 
come represents the net profit or loss from the operation of the 
property during the period accruing to the owners of the property 
after the pa3raent of all expenses including interest and other 
fixed charges. From the point of view of the stockholders, there- 
fore, net income is the all important item on the income statement, 
as it represents the net profits from their investment in the 
property. This investment includes both their originsil investment 
in stock and their share of the investment in the property of j^ofits ! 
not distributed as. dividends. 

The funds of the railroad are not always invested in physical 



The Income Statement g 

property used in the service of transportation, but are sometimes 
invested in the securities of other companies or in property used 
for operations other than transportation. The income from these 
securities or outside operations is included in the net income 
accruing to the stockholder as a return on his investment, but it 
does not represent income from the transportation operations of 
the company. The rates charged by the railroads for the trans- 
portation of passengers and freight and for other services are regu- 
lated by the Interstate Commerce Commission. In order that the 
commission may determine the net return on the investment in 
property used for transportation purposes arising from these rates, 
another balance on the income statement is used which excludes 
this outside income and also interest on bonds and other fixed 
charges. 

This balance which is the difference between railway operating 
revenues and railway operating expenses (including taxes and 
joint facility and equipment rents) is called ‘‘Net railway operat- 
ing income” and represents the net return upon the investment 
in property “held for and used in the service of transportation.” 

If the funds for the investment in railroad property had all 
been supplied by the stockholders of the company there would 
be no interest (or rentals) to pay arid net railway operating income 
would be available for distribution, to the stockholders. As a 
rule, however, a large part of the funds, have been supplied by 
the sale of bonds; that is, mortgages on the property and the 
interest on these bonds has to be met before any net income is 
available for distribution to the stockholders. 

In order to make the distinction between net income and net 
railway operating income clear to the reader so that he can re<x>n- 
struct an income statement to show these items se^rately, the 
tables on pages 150 and 152 of the Appendix have been prepared. 
The table on page ISO is an income statement in the form used 
by the Interstate Commerce Commission in its annual reports. It 
.will be noted that the balance “Net railway operating income” 
is not given in this table. The table on page 152 is a rearrahge-f 
m^nt of the items.in the table on page 150 in order to show; how 
the balance “Net railway operating income” is obtained. 

■ ^ a^e-ffiose fbr Glass I r^lroads in 




10 Analysis of Railroad Operations 

1923 (excluding switching and terminal companies) which are 
given in order to show the relative importance of the various 
accounts. Class I railroads are those having revenues in excess 
of $1,000,000 per annum. 

The statement on page 152 is summarized in the following table 
which presents in a few items the “high points” of the income 
statement. In this connection it should be pointed out that this 
form of statement is used by the Interstate Commerce Commission 
in its monthly summary of the revenues and expenses of Class 1 
railroads except that the items below “Net railway operating in- 
come” are not reported and the revenues and expenses are shown 
in more detail. 


Condensed Income Statement 
Class I Railroads 


Excluding Switching and Terminal Companies 


Reference to 
Appendix 
Table 2 


Acct. SOI 
Acct. SSI 


Calendar Year XQ23 


Railway operating revenues 
Railway operating expenses 


$6,289,S80,027 

4,895,166,819 


A Net revenue from railway operations .... $1,394,413,208 


Operating ratio 77.83 

Acct, 532 Railway tax accruals 331,915,459 

Acct. 533 Uncollectible railway revenues 1,941,658 


B Railway operating income $1,060,556,091 

L Equipment rents— net debit 73,884,508 

M Joint facility rents— net debit 24,716,127 


N Net railway operating income $ 961,955,456 

Ratio of expenses, taxes and rents to Rail- 
way operating revenues — 84.71 


D 

O 

P 

Q 

X 



Outside Income 


Miscellaneous operating income $ 358,905 

Non-operating income 269,938,975 


Gross income available for interest and 

other fixed charges $1,232,253,336 

Fixed <*ar«es . . . . ...... . ; 667,615,^ 


Het incomfe 


^i537;?o7 




# 

The Income Statement {-i ii 

Net Revenue from Railway Operations and OperatipjJ 'r 
Ratio. — It will be noted that a balance is struck between railway 
operating revenues and railway operating expenses, which is called 
'^Net revenue from railway operations.'^ It has long been the 
custom to regard this balance as the net amount for which the 
operating officials should be held responsible, as taxes and equip- . 
ment rents were considered in the same class as fixed charges and 
beyond the control of the operating officials. The “operating ratio," 
which is frequently used as an index of operating results, is 
obtained by dividing the railway operating expenses by the railway 
operating revenues. Expressed in other terms, the operating 
ratio represents the cost in cents of producing $1.00 of railway 
operating revenues. Since net railway operating income has been 
established as the official measure of the net return from transpor- 
tation operations, it would seem advisable to include in the income 
statement in addition to the operating ratio, the ratio of operating 
expenses, taxes and rents to railway operating revenues, as the 
inclusive operating cost of producing $1.00 of railway operating 
revenues. Furthermore, “Hire of freight cars," one of the princi- 
pal items in equipment rents is subject to a certain amount of 
control by the operating officials. 

The use of the operating ratio as an index of operating results 
is discussed in detail on page 52. 

Railway Operating Income. — Attention is also directed in 
passing to the next balance reported on the income stateinent, 
called “Railway operating income," which should not be confused 
with “Net railway operating income," The first named balance 
is obtained by deducting taxes and uncollectible railway revenues 
from net revenue from railway operations and prior to the 
establishment of “Net railway operating income” was used in a 
general way as the measure of the return from railway operations. 

As this measure has now been accurately and officially established 
the old balance is not used except for purposes of comparison with' 
previous years. On account of the similarity of the titles of these 
two balances) however, they are often confused and one should 
therefore always make sure of just what items are included in a 
balance; designated “Operating income," “Railway ojpera.ting in- 
come," ;pr “Net railway operating income " 



CHAPTER III 


RAILWAY OPERATING REVENUES 

Revenues from all sources arising out of the operation of the 
railroad property are included in the income statement in one 
account entitled ‘‘Railway operating revenues.” This general 
account is divided into primary accounts called “Operating revenue 
accounts,” which show the general sources of the revenues. The 
operating revenue accounts are summarized for the accounting 
period on a statement called “Railway operating revenues,” which 
forms the principal supporting schedule for the income account 
501 “Railway operating revenues” appearing on the income state- 
ment. A copy of this schedule, “Railway operating revenues,” for 
all Class I railroads in 1923 is given on page 154 of the Appendix. 
It will be noted that the total of the various accounts on this 
schedule, namely $6,289,580,027, is the same as the amount of 
“Railway operating revenues” shown on the income statement on 
page 150 of the Appendix. 

General Operating Revenue Accounts. — Railway operating 
revenues are divided by the Interstate Commerce Commission 
Classification into four general groups, as follows : 

1. Transportation — Rail Line 

II. Transportation — ^Water Line 

III, Incidental 

IV. Joint Facility 

Transportation — ^Rail Line. — ^The revenues classified as 
“Transportation— rail line” are those derived from transporting 
passengers, freight, express, mail and other traffic over the tracks 
of the railroad and on ferries, lighters or floats operating between 
; track terminials or between track terminals and points not reached 
by tracks, such as water transfer, service at ^ and across lakes 
’■'V vand rivers. ' . ■ ■ 



Railway Operating Revenues 13 

This transportation service can be divided into two classes : 

Freight Service 
Passenger and Allied Services 

Freight service consists of the movement of commodities in 
bulk, chiefly, in carload lots, where the element of time en route 
is not so important as a low freight rate. For this reason, freight 
trains are usually run as and when enough traffic is offered for 
movement at terminals to make a train load, instead of being run 
on a fixed daily schedule like passenger trains. There are, of 
course, exceptions to this general rule in the case of way freights 
and manifest freights which are run on regular schedules, but 
the general distinction between frdght train sendee and passenger 
train service is a slow irr^kr movement as compared with a fast 
regular movement on a fixed schedule. 

Passenger and allied services consist of the transportation of 
passengers and of mail, express and other commodities handled 
on passenger trains. These trains must leave on schedule time 
even if there are not enough passengers on board to pay the cost 
of coal and w^es of enginemen and trainmen. 

Transportation revenues (rail line) are recorded in the following 
primary accounts, which have been grouped in accordance with the 
character of the service : 

1. Accounts including revenues from freight service only. 

101. Freight 

lie. SwiteWng 

112. O^er freight train 

113. Water transfers^freight 

2. Accounts including revenues from passenger and alli^ 
services only. 

102. Passenger 

103. Excess baggage 

104. Sloping car 

ids. Parlor and chair car , ; ; 

■ 106. MaU 

107, Express. 

passenger train 

:.>;T^4.L^^r;''<;raasfet^pas^ger.- 




14 Analysis of Railroad Operations 

3, Accounts including revenues from both classes of service. 

109. Milk 

111. Special service train 

115. Water transfers — ^vehicle and livestock 

116. Water transfers — other 

Freight Service. — ^Account 101, ''Freight,*' includes all revenues 
from the transportation of freight, in which a line haul (move- 
ment between stations) is a part of the service performed and 
for which the freight charges are based on the weight of the com- 
modity transported. Other revenues from the transportation of 
freight are recorded as follows : 

Revenues from switching service performed by a railroad which 
is not a part of a line haul on that railroad are included in Account 
110, "Switching.” This account includes revenues received from 
switching both loaded and empty cars. Revenues from a local 
transfer of freight on ferries or lighters which is not a part of a 
rail line haul on the reporting railroad are included in Account 
1 13, "Water transfers— freight.” 

Revenues from the transportation of milk on freight trains which , 
are based on a flat rate per package regardless of weight are in- 
cluded in Account 109, "Milk.” 

Revenues from the transportation of freight on special trains 
where the entire charge for the train is on a lump sum basis or 
at a specified rate per train mile regardless of the weight of freight 
carried are included in Account 111, "Special service train.” 

Revenues from the local transportation of vehicles and livestock 
on freight ferries or other equipment used for the water transfer 
of freight when not part of a rail line haul on the reporting rail- 
road are included in Account 115, "Water transfers — ^vehicle and 
livestock.” 

Account 112^ “Other freight train,” and 116, “Water trans- 
fers — other,” include miscellaneous revenues for the transporta- 
tion of freight not otherwise provided for. 

While revenues from the transportation of freight may be found 
in all of these eight accounts. Account 101, "Freight” represented 
98 per cent of the total of these eight accounts for all Qass I 
roads in 1923. These reports for Class I roads dp nb^ however, 





RcMway Operating Revenues 15 

include the so-called switching or terminal railroads which have 
little, if any, line haul of freight and whose principal business 
is switching. The principal revenues from freight service for these 
•railroads are therefore found in Account 110, “Switching.” 

Passenger Service. — ^Account 102, “Passenger” includes all 
the revenues from the transportation of passengers, except those 
trips made in special trains where the charge is on the basis of a 
flat rate per train or train mile, without regard to the number of 
passengers carried (See Account 111, “Special service train”), 
local trips on ferry boats which are not made in connection with a 
trip over the railroad (See Account 114, “Water transfers — 
passenger”), and some miscellaneous items included in Account 
108, “Other passenger train.” 

Excess Baggage (Account 103).— Turning now to the ac- 
counts in which the revenues from the services “allied” with 
passenger service are recorded, we find the first is entitled “Excess 
Bag^ge.” This account is relatively unimportant because a 
charge is only made for carrying baggage in the baggage car when 
the weight is in excess of a specified amount, usually 150 pounds 
per passenger and no charge is made for hand luggage carried in 
the coaches, sleepng and parlor cars. While, therefore, the rail- 
road performs a substantial transportation service in carrying 
baggage for passengers, it receives very little revenue from this 
source on account of the large amount carried free under the rtiles. 

Sleeping and Parlor Car Service (A.ccounts 104 and 105). — 
When a railroad operates its own sleeping and parlor cars, the 
revenues received from the sale of berths or seats in these cars 
are included in these accounts. When, however, these cms are 
operated by the Pullman Company, which is the case on most rail- 
roads, the revenues from the sale of berths or seats go direct 
to the Pullman Company and nothing is included by the railroad 
in these accounts. 

Amoimts received by the railroad company under its contract 
. with the Pullman Company for operating parlor or sleej^g oars 
over its line are included iii Account 108, “Other pakehger train 
revenue.” Amounte paid by the railroad to the Pullman Company 
under tWs contraict are, included in Ihcpme Accouirt 538/ “Rent, for 
v>\--pas 5 rager;,’train, Cara.”, 



i6 Analysis of Railroad Operations 

Railway Mail Service (Account 106). — ^The mail service 
is one of the most important of the "‘Allied” services furnished by 
the railroad. It is paid for by the Government principally on 
the basis of the amount of space occupied on trains by the sacks 
of mail and parcel post and by the mail clerks handling the mail in 
railway post oflBce cars on regular mail routes established by the 
Government. 

Railway Express Service (Account 107). — ^The express 
service on railroads in the United States is handled by contract 
with either the American Railway Express Company or the South- 
eastern Express Company. Under these contracts the railroads 
furnish the cars and space at stations, but the pick up and delivery 
of the express packages is usually handled by the employees and 
trucks of the express company. The men handling the express 
at stations and on trains are either exclusive employees of the ex- 
press company or joint employees of the railroad company and 
the express company according to the nature of their duties. The 
administration and general accounting is all handled by the ex- 
clusive employes of the express company. 

The revenues from express service are received by the express 
company, which pays the railroad company for its services in 
accordance with the provisions of the contracts referred to above. 
The basis is usually either a flat percentage of the gross earnings 
of the express company from business handled over that particular 
railroad before the deduction of any expenses or the net earnings 
after the deductions of expenses and other stipulated items. What- 
ever basis is used, the amount received by the railroad from the 
express company under these contracts is included in Account 107, 
""Express.” 

The principal revenues received from ""allied” services are those 
recorded in the accpunts described above. As in the case of freight 
and passenger service some revenues from ""allied” services are 
xecorded in the accounts common to both freight and passenger 
train service, namely : . 

. -m'Miik 

, ’ ' 1.11, Special service train-' ; 

Water tratisfers-^vehicdes and Hyestock V ^ 

■;n6. .’V^ter-trani5|ersT-<)^^ 






Railway Operating Revent^s 17 

The relative importance of these various accounts is indicated 
by the following table showing the amount and percentage of each 
account containing revenue from passenger and allied services 
to the total of all such accounts for Class I railroads in 1923. 


Per cent 

Account Amount of Total 

102. Passenger $1,145,698,579 78.27 

103. Excess baggage 8,690,5(X) .59 

104. Sleeping car 2,623,415 .18 

105. Parlor and chair car 1,354,470 .09 

106. Mail 92,896,555 6.35 

107. Express 152,885,162 10.45 

108. Other passenger train 13,637,536 .93 

114. Water transfers— passenger 2,262,963 .16 

Total of accounts containing revenues 
from passenger and allied services 

only $1,420,049,180 97.02 


109. Milk $ 34,109,221 2.33 

111. :Special service train 2,384,443 .16 

115. Water transfers— vehicles and livestock 5,818,737 .40 

116. Water transfers— other 1,329,656 .09 

Total common accounts $ 43,642,057 2.98 

Grand total ; $1,463,691,237 100.00 


It will be noted that these common accounts only represent 
about 3 per cent of the total of all accounts containing revenues 
from passenger and allied services. 

Transportation — ^Water Line.— Some railroad compmiies 
operate steamship lines which perform an entirely distinct trans- 
portation service from that of their rail lines. When these opera- 
tions are carried on as a part of the operations of the railroad 
company, and the investment in steamship property is included in 
the property investment of the railroad company, the revenues 
from these operations are included in the primary accounts under 
Transportation— Water line. When these water line operations 
are carried on by a separate ''steamship"^ company organized fcjr 
that purpose, and the investment of. the railroad company is in the 
form of stock ownership in the ^^te^ship^' company, the revenues 
aiid expenses of these water line operations are rqpori^d 
^ /^steamship?" cbinpany and ate not included in the reytou^ and ex- 




1 8 Analysis of Railroad Operations 

penses of the railroad company or reported by it to the Interstate 
Commerce Commission. 

The direct operation of steamship lines by the railroad company, 
the revenues from which are included in Transportation-Water 
line, must not be confused with the operation of ferry boats and 
other harbor transfer service in connection with the rail lines, 
the revenues from which are included in Transportation-Rail line 
revenues. 

Water line transportation revenues are included in the following 
primary accounts the classification being generally similar to that 
of Transportation-Rail line revenues. 

121. Freight 

122. Passenger 

123. Excess baggage 

124. Other passenger service 

125. Mail 

126. Express 

127. Special service 

128. Other 

Incidental Revenues. — In addition to the revenues earned from, 
the transportation of passengers and freight, mail, express and 
other traffic by rail and water lines, the railroad companies derive 
substantial revenues from the operation of facilities incidental to 
the transportation service, such as dining and buffet cars, hotels 
and restaurants at stations, parcel rooms and other station privi- 
leges. Charges are also made for the storage of baggage and 
freight and for demurrage ; that is, the detention of freight cars 
by shippers over the free time allowed for loading and unloading 
freight. There are other auxiliary services rendered by railroads 
in connection with the transportation service from which revenues 
are derived, and the character of each can be determined by the 
titles of the accounts as given below : 

138 Telegraph and telej^one 
' 139 Grain elevator 

140: Stock yard ‘,"r . 



Railway Operating Revenues 


19 


141 Power 

142 Rents of buildings and other property 

143 Miscellaneous 

The amounts received from these miscellaneous sources vary 
with the different railroads, but the fact that these accounts are 
relatively unimportant is shown by the fact that the total of these 
six accounts for all the railroads of the United States in 1923 was 
less than one per cent of the total railway operating revenues. 

Joint Facility Revenues. — ^The amounts included under this 
general heading are classified as follows : 

1. Joint Facility Credits. These include the amounts which a 
railroad receives from other railroads with which it makes joint 
use of tracks and terminals, representing its share of certain 
revenues derived from the operation of those facilities, such as 
switching, station, train and boat privileges, parcel rooms, etc. 
By order of the Commission, eflfective Aug. 1, 1925, the revenues 
from joint train service are also accounted for as joint facility 
revenues. 

2. Joint Facility Debits. This account is the opposite of joint 
facility credits, that is, it includes the amounts the carrier owning 
the joint facility pays to the other users as their share of. the 
revenues of these facilities. The total amount of these revenues 
is included in the appropriate primary account by the owning 
carrier while the portion of this total amount paid out to the other 
roads is included in the joint facility debit account, and is, there- 
fore, a deduction from revenues. The railroads receiving this joint 
facility revenue include it in joint facility credits as previously ex- 
plained. (In this connection the reader should note that “credits^' 
represent additions to revenues while ‘"debits” represent deductions ; 
the reverse being the case with credits and debits to expenses.) 

Relative Importance of Various Operating Revenue 
Accounts. — ^The relative importance of each of the various operat- 
ing revenue accounts is indicated by the statement of railv^y ' 
operating revenues for Class I railroads in 1923 oh page 154 bf 
the Appendix. The percentage of each account to total irmlwiy 
operating revenue is given on this table and while the^ pef centres 
will vary of cpur^ jfor the mdiridu^^r^^ 



20 Analysis of Railroad Operations 

the reader a general picture of the principal sources of railway 
operating revenues. 

Classification of Operating Revenues. — On page 169 of the 
Appendix will be found a copy of the “Classification of operating 
revenues and operating expenses of steam roads” as prescribed 
by the Interstate Commerce Commission. A detailed description 
of the operating revenue accounts is given in this classification 
on pages 175 to 189 of the Appendix, and the reader is urged to 
supplement the foregoing general description of the revenue ac- 
counts by a careful study of the details as set forth in the 
classification. 



CHAPTER IV 

STATISTICS OF FREIGHT AND PASSENGER 

SERVICE 

We have seen that railway operating revenues arise chiefly from 
the performance of transportation service as recorded in trans- 
portation revenue accoimts and that the larger part of these trans- 
portation revenues (90%) are included in two accounts— 101, 
"Freight,” and 102, “Passenger.” These freight and passei^r 
revenues are dependent upon two elements. 

1. The quantity of transportation furnished 

2. The rate charged for the service 

The quantity of service performed is recorded in the traffic 
statistics. The rates are published in the tariffs issued by the 
railroads. 

Basis of Freight Rates. — The rates charged by a railrosuf for 
the transportation of freight are based on the kind of wmmb^ty, 
weight, kind of shipment, that is> whether it is handled in carlqad 
or less carload lots and the distance transported. These rates are 
usually expressed in cents or dollars per 100 pounds or per ton, 
except in switching service when the rate is sometimes exj^essed 
in dollars per car, regardless of the kind of anmnodity ^d 
weight. 

All freight rates are published in tariffs available to thus public 
and must be approved by the Interstate Commerce Cotnmissipn 
before becoming effective. Freight can only be transported law^ 
fully at the published rates. TUs does away with any discrinfina? 
tipn in rates charged small shippers as secret rebates are iinktirftd 
and have long been discontinued. 

: ,oif\.F.reight;'Seryic^Reyenue ■' 




22 Analysis of Railroad Operations 

in classifying freight traffic by the various commodities handled. 
The Interstate Commerce Commission has prescribed a uniform 
classification of freight commodities to be used by Class I and 
II railroads (except switching and terminal companies) in report- 
ing tons of revenue freight originated on the railroad and received 
from connecting carriers. Class I and II railroads include those 
having revenues in excess of $100,000 per annum. 

The sum of the tons originated and tons received from connec- 
tions represents the total tons of revenue freight transported by 
the railroad during the period in question. 

The various classes of commodities named in the order of the 
Commission of December 1, 1919, ‘Tn the matter of freight com- 
modity statistics,” are given in the following table : 


Pkoducts of 

1. Wheat. 

2. Com. 

3. Oats. 

4. Other grain. 

5. Flour and meal. 

6. Other mill products. 

7. Hay, straw, and alfalfa. 

8. Tobacco. 

9. Cotton. 


Products 

17. Horses and mules. 

18. Cattle and calves. 

19. Sheep and goats, 

20. Hogs. 

21. Fresh meats. 

22. Other packing-house products. 


Products 

29. Anthracite coal. 

30. Bituminous coal. 

31. Coke. 

32. Iron ore, 

33. Other ores and concentrates. 

34. Base bullion and matte. 


Inducts 

40. Logs, posts^ poles, and cordwOod. 

41. Ties. 

, ;';.42i.. Pulp wood.' 


Agriculture 

10. Cotton seed and products, ex- 

cept oil.^ 

11. Citrus fruits. 

12. Other fresh fruits. 

13. Potatoes. 

14. Other fresh vegetables. 

15. Dried fruits and vegetables. 

16. Other products of agriculture. 


’ Animals 

23. Poultry. ; 

24. Eggs. 

25. Butter and cheese. 

26. Wool. 

27. Plides and leather. 

28. Other products of animals. 


OF Mines 

35. Clay, gravel, sand, and stone. 

36. Crude petroleum. 

37. Asphaltum. 

38. Salt. 

39. Other products of mines. 


F Forests ' ■' 

43, Lumber,* timber, box; shocks, 

stayesi and hcadihgi 

44. Othdr products of iforests. 




Statistics of Freight and Passenger Service 23 


Manufactures and Miscellaneous 


45. Refined petroleum and its prod- 

ucts. 

46. Vegetable oils. 

47. Sugar, sirup, glucose, and mo- 

lasses. 

48. Boats and vessel supplies. 

49. Iron, pig and bloom. 

50. Rails and fastenings. 

51. Bar and sheet iron, structural 

iron, and iron pipe. 

52. Other metals, pig, bar, and sheet. 

53. Castings, machinery, and boilers. 

54. Cement. 

55. Brick and artificial stone. 

56. Lime and plaster. 

57. Sewer pipe and drain tile. 


58. Agricultural implements and ve- 

hicles other than automobiles. 

59. Automobiles and autotrucks. 

60. Household goods and second- 

hand furniture. 

61. Furniture (new). 

62. Beverages. 

63. Ice. 

64. Fertilizers (all kinds). 

65. Paper, printed matter and books. 

66. Chemicals and explosives. 

67. Textiles. 

68. Canned goods (all canned food 

products). 

69. Other manufactures and mis- 
cellaneous. 


70. Merchandise — ^All L.CL. Freight 


Classes 1 to 69 include carload traffic only, all L.C.L. 
traffic being included in Qass 70, L.C.L. or less carload traffic 
includes all shipments under 10,000 pounds. Shipments of 10,000 
pounds or more are classified as carload traffic, even though other 
L.C.L. shipments may be handled in the same car. 

The number of carloads, as well as the tons, are reported by 
commodities for the carload traffic, but this information is not 
given for the less carload traffic. The average loading of cars 
containing less carload freight is, however, very much less than 
that of the carload traffic, usually averaging between 5 and 10 tons 
per car as compared with an average of about 30 tons per car 
for carload traffic. 

This division of the freight tonnage of a railroad into 70 classes 
gives a general idea of the nature of its freight traffic and is the 
only information of the kind ordinarily published by a railroad. 
The records of the traffic or accounting departments, however, 
usually contain detailed information about the activities of the 
principal industries on a railroad, the shipments made and re- 
ceived by each ; and the freight interchanged with each connecting 
railroad, from which a further analysis of freight traffic can be 
made. 

Revenue Ton Miles. — It was pointed out that the amount of 
revenue which a railroad receives for transporting a shipment of 
-freight:depends..pn;- 'V;' 



24 


Analysis of Railroad Operations 

1. Kind of cMnmodity 

2. Weight 

3. Elind of shipment (carload or less carload) 

4. Distance transported 

The statistics of revenue tons carried record the kind of com- 
modity and the weight for carload shipments and the weight of 
less than carload shipments. These statistics, however, do not 
record the distance transported and do not, therefore, complete 
the record of transportation service performed. 

In order to record this element of distance transported which 
varies greatly with different shipments, another statistical unit 
has been developed, called “tons moved one mile” or more com- 
monly “ton miles.” 

For example, if Road A moves a ton of iron a distance of 100 
miles, this movement is considered the equivalent of moving 100 
tons for a distance of one mile. Road A, therefore, has moved 
100 tons one mile and produced 100 ton miles. If Road B moves 
a ton of iron a distance of 200 miles it has produced 200 ton miles 
or twice the amount produced by Road A* If the shipments had 
weighed 10 tons each instead of one ton. Road A would have pro- 
duced 10 tons X 100 miles or 1,000 ton miles and Road B, 10 
tons X 200 miles or 2,000 ton miles. 

In other words, to obtain the ton miles for any shipment, the 
weight of the shipment in tons is multiplied by the distance tnoved 
in miles. This distance is the road movement between stations 
only. Switching movements at terminals and in intermediate train 
yards are not included. In compiling the ton miles for a 
number of different shipments, it is necessary to compute first 
the ton miles for each individual shipment and then add -these 
ton miles together to get the total ton miles for all shipments. 
The total ton miles for the period are intended to represent the 
total ton miles of all shijraents of freight over the railroad during 
the period, the revenues from which are included in Account 101, 
“Freight.” 

In this connection, it is well to note the difference betwe^ 
revenue ton miles, net ton miles and gross ton miles. Revenue 
ton nules indude the ton miles of freight for the transportatibn of 
which, the frdght revenues (Amount 101, “Freight") are revived. ; 



Statistics of Freight and Passenger Service 

Nonrevenue ton miles include the ton miles of nonrevenue 
company freight, for which no revenue is received. 

Net ton miles or revenue and nonrevenue ton miles include 
the ton miles of all freight transported by the railroad whether 
or not revenue is received for the transportation thereof. 

Gross ton miles (cars and contents) include the net ton miles 
and also the tare ton miles ; the latter being based on the weight 
of the cars exclusive of the contents thereof including both loaded 
and empty cars. 

While the revenue ton miles in two periods reflect the relative 
amount of transportation service performed so far as the distance 
transported between stations is concerned, they do not entirely 
reflect the relative amount of terminal service performed. 

Taking the shipment of iron on Road A and Road B as an 
example, while Road B hauled its shipment of iron twice as 
far as Road A and produced twice the ton miles, it cannot be 
said that it performed twice as much transportation service. It 
requires just as much initial and final terminal service for a 
shipment transported 100 miles as for a shipment transported 
200 miks. This constant factor of terminal service in connection 
with all shipments r^rdless of distance is usually taken care of 
in the rates by the inclusion of a fixed amount to cover terminal 
service, but nothing is added to the ton miles to reflect this service. 
Consequently, the average revenue per ton mile tends to decrease 
as the distance hauled increases. 

Distance Tariff .—This relation between revenue per ton, dis- 
tance transported, and revenue per ton mile is shown by the follow- 
ing table based on a typical distance tariff ; 



26 Analysis of Railroad Operations 

Taken from New England (Anderson) Scales under the 10% Reduc- 
tion Effectivb July 1, 1922 


Zone Class 


1 

2 

3 

4 

Rate 



Rate 

per Ton 

Distance 

Rate per 

per Net Ton 

Mile (Column 

(Miles Not Over) 

100 Pounds 

2000 Pounds 

3 Column 1) 

5 

$.10 

$2.00 

$.4000 

10 

.105 

2.10 

.2100 

20 

.120 

2.40 

.1200 

30 

,125 

2.50 

.0833 

40 

.140 

2.80 

.0700 

50 

.150 

3.00 

.0600 

75 

.165 

3.30 

.0440 

100 

.180 

3.60 

.0360 

150 

.205 

4.10 

.0273 

200 

.235 

4.70 

.0235 

300 

.260 

5.20 

.0173 

400 

.290 

5.80 

.0145 


In analyzing the effect of fluctuations in revenue ton miles 
on freight revenues due weight must be given to the fact that 
increases or decreases in ton miles due to changes in the average 
distance hauled will not ordinarily result in proportionate increases 
or decreases in the freight revenues. 

Average Revenue per Ton, Revenue per Ton Mile, and 
Distance Carried, — ^The Interstate Commerce Commission does 
not require that the freight revenue and the revenue ton miles 
shall be classified by commodities in the way in which the tons 
are classified, so that only the total freight revenue and the total 
revenue ton miles are reported to the Commission. Some roads 
compile ton miles and revenue by commodities for their own in- 
formation and are able to determine the average revenue per ton, 
revenue per ton mile and distance carried for each commodity 
given in the table on page 22. Other roads compile the tons and 
revenue by commodities but not the ton miles. 

The calculatipns by which these statistics are obtained either for 
an individual shipment or for all shipments during the period are 
given in the following table: 



1 . 

2 . 

3. 

4. 

5. 

6 . 


7. 


8 . 


9. 

10 , 

11 . 

12 . 


SMistics of Freight and Passenger Service 27 


Weight of shipment (tons). 

Distance carried (miles) 

Rate per ton 

Freight revenue (Item 1 X Item 3) 

Ton miles (Item 1 X Item 2) 

Average revenue per ton mile (Item 4.-4- Item 5) 
or (Item 3 *4- Item 2) 


Individual Shipment 
50 
100 
$1.50 
75.00 
5000 


1.5 cents 


All Shipments 
During the Period 

Freight revenues (Total of Item 4 for individ- 
ual shipments) (Account 101, Freight) — $ 3,(X)0,000 
Tons carried (Total of Item 1 for individual 


shipments) 1,000,000 

Ton miles (Total of Item 5 for individual 

shipments) 150,000,000 

Average revenue per ton (Item 7 4- Item 8) . . 3.00 

Average distance carried (Item 9 -4- Item 8) . . . ISO 

Average revenue per ton mile (Item 7 -r- 
Item 9) or (Item 10 -4- Item 11) 2.0 cents 


The Waybill.— The principal source from which these statis- 
tical data relating to freight traffic are secured is the waybill. This 
is one of the most important accounting and statistical documents 
on a railroad. Every shipment of revenue freight must be covered 
by a waybill, this being the conductor's authority to transport it in 
his train. Consequently in the waybills we have a complete record 
of the freight transportation service rendered by a railroad. 

A copy of the form of waybill recommended by the Railway 
Accounting Officers' Association is given on page 370 of the 
Appendix and indicates the amount of detailed information about 
a freight shipment available from these documents. 

It will be noted that the following information is given on the 
waybill : 


1. Waybill reference 

2. Car number and initials 

3. Stenciled weight of car when empty 

4. Originating point 

5. Destination 

6 . Route (Junction points if the shipment is handled by . more 

than one railroad) 


7 , Shipper ^d consignee 
& Kipd of commodity 




28 


Analysis of Railroad Operations 

9. Weight of car and contents — gross 

10. Weight of freight 

11. Rate 

12. Freight charges 

From this information the following statistics can be compiled : 

A. Tons carried (From Item 10) 

B. Distance carried (From Items 4 and 5) 

C. Revenue ton miles (A X B) 

D. Tare ton miles (Tare from Item 3 X B) 

E. Gross ton miles (Gross weight in tons from Item 9 X B) 

Nonrevenue Freight. — In addition to the freight carried for 
which it receives revenue and which is called revenue freight, a 
railroad carries a large tonnage of materials and supplies for its 
own use on which no freight charges are assessed. Coal, ties, 
rails, ballast, lumber, iron and steel castings, wheels and other 
repair parts for locomotives and cars and other equipment are 
some of the principal items of company freight or “nohrevenue 
freighf^ as it is called usually. The classification of nonrevenue 
freight by commodities is not required by the Interstate Commerce 
Commission and is not ordinarily kept by the individual railroads, 
but the total tons and ton miles of nonrevenue freight are re- 
ported in Items 92 and 95 of Schedule 531, Railway Operating 
Statistics, of the Annual Report of the Interstate Commerce Com- 
mission (see page 369 of the Appendix). 

The relation of this nonrevenue freight to total freight on all 
Class I railroads in 1923 is shown by the following table : 



All Gass 1 Railroads 
1923 

Per Cent 
of Total 

Tons Carried 

Revenue freight 

2,333,600,764 

89.4 

Nonrevenue freight 

276,455473 

10.6 

Total tons carried 

2,610,056,137 

1004 

Ton Mil^s 



Revenue freight 

412427428,422 

90,5 

Nonrevenue freight ... .. 

..... 43410;651,101 


Total ton miles 

4564374^423 




Statistics of Freight and Passenger Service 29 

Nothing is included in freight revenues on account of the trans- 
portation of this nonrevenue freight and the nonrevenue tons and 
ton miles have no relation to the freight revenues. The cost of 
transporting this nonrevenue freight is however included in the 
expenses and these statistics are therefore 'of importance in 
analyzing the expenses as hereafter explained. 

Passenger Service — Character o£ Service and Basis o£ 
Rates. — Passenger traffic is much simpler to analyze than freight 
traffic. The regular rates are based strictly on distance and there 
is only one commodity to consider, the passenger. There are, of 
course, different conditions of travel, which may be classified as 
follows 

1. Regular travel in day coaches except commutation and ex- 

cursion travel. Travel under these conditions is at the regular 
basic rate per mile, half fare usually being charged for children 
between 5 and 12 years of age and nothing for children under 
5 years of age. • 

2. Regular travel in sleeping or parlor cars. For this service, 
the passenger is charged the regular railroad transportation rate, 
the berth or seat fare, and in addition a surcharge equal to one- 
half the berth or seat fare. This surcharge is included in Account 
101, ‘‘Passenger,” as part of the transportation charge. 

3. Excess fare trains. If the journey is made on certain fast 
trains called excess fare trains, an additional charge is nrnde; based 
on the saving in time over the standard schedule. 

4. Commutation travel. In order to accommodate people living 
in the suburbs of large cities who desire to make frequent trips to 
town, the railroads are accustomed to make special rates called 
commutation rates, which are very much lower than the regular 
fare. For passengers making daily trips, these commutation rates 
take the form of monthly or 60-trip tickets, good only £pr the 
person to whom issued and expiring at the end of the moiith or 
30-day period. In other cases, tickets good for from 10 to 50: trips 
to be used within a specified period are issued to families .oi; with- 
out restriction. All these forms of commutation tickets 

at a great reduction oyer the regular rates, the averag^ r^^ 
mile for commutation tjckets oh roads in 1$24^ J;:104 



30 Analysis of Railroad Operations 

cents as compared with the average rate per mile of 3.383 cents 
for all other tickets. 

5. Excursion travel. There is also another set of reduced 
rates called excursion rates, which are made to cover trips made 
under certain conditions and with certain specified limits of time. 
Sometimes these tickets are only good on special trains called 
‘‘Excursion trains.” In other cases, they are good on all regular 
trains. The conditions under which these reduced rates are 
enjoyed vary greatly. 

Statistics of Passenger Traffic. — The statistics of passenger 
traffic which are reported by railroads in the annual Reports to 
the Interstate Commerce Commission are rather meagre and consist 
only of the “passenger revenue,” “revenue passengers carried” and 
“revenue passenger miles” and various averages derived there- 
from, as shown in the following tables. The passenger miles are 
comparable to freight ton miles in reflecting the element of dis- 
tance. Passenger revenues, revenue passengers carried and 
revenue passenger miles are further divided as between commu- 
tation and all other passengers in the monthly reports of the 
railroads to the Interstate Commerce Conunission on Form OSD 
— ^Revenue traffic. More detailed information about passenger 
traffic such as the earnings by trains, and betw^n certain cities, is 
usually available from records kept in the accounting and pas- 
senger traffic departments of the individual railroads. 

The calculations by which the statistics of passenger traffic 
are obtained from an individual trip and from all trips during the 
period are shown in the following table : 

Individual Trip 


1. Number of passengers 1 

2. Distance carried 200 

3. Fare per passenger (Excluding berth or seat 

fare) $7.20 

4. Passenger revenue (same as Item 3) 7.20 

5. Passenger miles (same as Item 2) 200 

6. Average revenue per passenger mile (Item 4 

-r- Item 5) or (Item 3 -i- Item 2) 3.6 cents 



Statistics of Freight and Passenger Service 31 

AH Trips 
During the Period 


7. Passenger revenue (Total of Item 4 for all 

trips) (Account 102, Passenger) $810,000 

8. Passengers carried (Total of Item 1 for all 

trips) 300,000 

.9. Passenger miles (Total of Item 5 for all trips) . . 27,000,000 

10. Average revenue per passenger (Item 7 -h 

Item S) $2.70 

11. Average distance carried (Item 9 -r- Item 8) . . . 90 

12. Average revenue per passenger mile (Item 7-fr 

Item 9) or (Item 10 -r- Item 11) 3.0 cents 


Statistics o£ "Allied” Services. — No traffic statistics are re- 
quired by the Interstate Commerce Commission in connection 
with mail, express and other "allied” services. The necessary 
basic information for such statistics is usually available in the 
records of the accounting department, except in the case of 
Account 107, ‘‘Express,” for which the data would have to be 
secured from the express company. 

As a rule, however, these traffic statistics of "allied” services 
are not compiled currently by the railroads. The principal fluctua- 
tions in the revenues are usually found in freight and passenger 
revenues and the statistics of freight and passenger traffic are 
considered sufficient for the purposes of analysis. Should there 
be unusual fluctuations in the other accounts, a special analysis 
is usually made of those fluctuations and if necessary appropriate 
statistics are compiled from the accounting department records. 
The same practice is followed in rate cases involving "allied” 
services. 





CHAPTER V 

ANALYSIS OF FLUCTUATIONS IN RAILWAY 
OPERATING REVENUES 

In the foregoing chapters we have studied the accounts in which 
the revenues of a railroad are recorded and the traffic statistics 
which indicate the service performed from which the principal 
revenues are derived. Let us now examine the methods by which 
these accounts and statistics are used to analyze the results ob- 
tained during any particular period. 

As previously stated the revenues and expenses for the period 
under consideration called the ^‘current period” are usually com- 
pared with those of some earlier period called the “previous 
period” which is taken as the standard with which to measure 
the results obtained in the current period. In analyzing the fluctu- 
ations in revenues the first step is to compare the amoxmts shown 
for each primary account in the current period with those of the 
previous period. 

We have seen from the statement of Railway Operating Reve- 
nues for Class I Railroads in 1923 given on page 154 of the 
Appendix that approximately 90 per cent of the revenues are 
included in the two accounts 101, “Freight,” and 102, “Passenger.” 
The analyst is therefore principally concerned with the causes of 
the fluctuations in these two accounts. 

Analysis of Fluctuations in Account 101, “Freight.” — In 
the previous chapters it was pointed out that the freight revenues . 
of the period represented the total of the rev^ues derived from 
thousands of individual shipments handled during the period; that 
the revenue of each shif^ent depended u^n the weight of the 
shipment and the rate; tliat the rate varied in accordance with 
the kind of commodity, distance carried and loading (c^load or 
dess carload) and that the two dements Of service, viz,, weight 
• and distance carried were reflected in the t^nit of tiaffic : caUed^ : ; 
^ mile. Consequently the reventie per ton nifle for any ; ■ 




Fluctuations in Railway Operating Revenues 33 

particular shipment represents the rate at which the freight trans- 
portation service required by that shipment was performed. The 
average revenue per ton mile for all shipments obtained by divid- 
ing the total revenues from all shipments by the total ton miles, 
represents the average rate at which the freight transportation 
service of the railroad taken as a whole was performed. 

For purposes of analysis, total freight revenues may be said to 
depend primarily upon two elements : 

1 . Revenue ton miles 
2* Average revenue per ton mile 

If freight revenues and ton miles were classified by commodities 
in the same way that the tons are classified as explained on 
page 22, the ana,lysis of fluctuation in freight revenues would 
consist in locating the commodities in which the principal fluctua- 
tions in revenues occurred and then determining the causes of 
these fluctuations, that is, whether they were due to changes in 
the ton miles, in the average revenue per ton mile or to a com- 
bination of both causes. 

The classification of revenues and ton miles by commodities is, 
however, not required by the Commission, and is only kept on a 
few railroads. Consequently the usual method of analysis follows 
a different course. 

The first step is a comparison of the freight revenue, tons and 
ton miles and the averages derived therefrom, as exemplified by 
the following table : 

Increase or Decrease 

Current Previous Per 

Period Period Amount Cent 

Frdlght revenue (Account 


101) $ 3,630,000 $ 3,000,000 $ 630,000 21.0 

Revenue tons carried 1,250,000 1,000,000 250,000 12.5 

Revenue ton miles 165,000,000 150,000,000 15,000,000 10.0 

Average 

Revenue per ton $2,904 $3,000 $d.096 d 3.2 

Distance carried (miles) . . . 132 150 £? 18 d 12.0 

Revenue per ton mile .... . . $.022 $.020 $ .002 10.0 ^ 


. Analyzing the results shown in this example we find increase 
of 21 per cent in freight revenue, which was due to a cqmbihatibn 
. of an incre^e of 10 per:cj^t in the transjKDrtation service^ per- 



34 Analysis of Railroad Operations 

formed as indicated by the .ton miles and an increase of 10 per cent 
in the average rate at which the service was performed as indicated 
by the average revenue per ton mile. 

Formula for Combining Percentages of Change.— At this 
point it seems appropriate to call the reader’s attention to the 
formula for combining the percentages of increase or decrease in 
the two factors of a product to obtain the percentage of increase 
or decrease in the product, the formula being as follows : 

The percentage of increase or decrease in the product of two 
items is the sum of the percentages of increase or decrease of these 
items plus the product of these percentages. 

For example, in the table given above freight revenue is the prod- 
uct of the ton miles and the average revenue per ton mile. There- 
fore, we have the percentage of increase in ton miles (10 per cent) 
plus the percentage of increase in the average revenue per ton 
mile (10 per cent) equals 20 per cent. The product of 10 per cent 
and 10 per cent (.10 X -10) = -01 or 1 per cent; 20 per cent + 1 
per cent = 21 per cent, the percentage of increase in freight 
revenue. 

Let us take another example to show the effect of decreases, also 
from the foregoing table. The average revenue per ton is the 
product of the average distance carried and the average revenue 
per ton mile. In this case we have the percentage of decrease in 
the distance carried ( 12 per cent) plus the percentage of increase 
in the average revenue per ton mile ( 10 per cent) or in other words 
the algebraic sum of —12 per cent and +10 per cent or —2.0 per 
cent. The product of —12 per cent and +10 per cent is —1.2 per 
cent. The sura of —2.0 per cent and —1.2 per cent = —3.2 per 
cent, the percentage of decrease in the average revenue per ton. 

This combination of percentages enables the analyst to make a 
quick check of the general accuracy of the figures on a statistical 
summary similar to the example given above. If the percentages 
do not check out in the manner outlined above there is something 
wrong with the figures. 

Returning now to our analysis of the fluctuation in freight 
revenue on the sample statement, our next step is to determine 
the causes for the fluctuation of 10, per cent in the revenue ton 
'miles. 



Fluctuations in Railway Operating Revenues 35 

As most roads do not keep a record of ton miles by commodities, 
the causes for the increase in ton miles must be determined by an 
analysis of the revenue tons carried during each period divided 
into the principal commodities listed on page 22. 

With this commodity statement as a guide the analyst can 
usually determine from the detailed records in the traffic depart- 
ment, the industries responsible for fluctuations in tonnage. The 
principal point to determine is whether the fluctuations are in com- 
petitive business, or in non-competitive business so that the activi- 
ties of the traffic department can be directed to the best advantage. 

Causes of Fluctuations in the Average Revenue per Ton 
Mile*. — The causes for fluctuations in the average revenue per ton 
mile are more difficult to determine, for this item represents the 
average revenue per ton mile for thousands of shipments during 
the period. Unless the revenues and ton miles are classified by 
commodities the analysis of fluctuations in the average revenue 
per ton mile must of necessity be largely a matter of guess work. 

These fluctuations may be due to one or more of the following 
causes : 

1 . Increases or decreases in the rates established by the tariffs 
of the railroad for the same transportation service. 

2 . A change in the character of service with no change in the 
rates. For example, more tonnage may be moved for shorter hauls 
for which the revenue per ton mile is higher than for longer hauls, 
thereby increasing the average revenue per ton mile. 

3 . A change in the character of the trafiic handled. For ex- 
ample, if coal trafiic has a low revenue per ton mile and the per- 
centage of coal ton miles to total ton miles increases, the effect 
thereof would be to reduce the average revenue per ton mile. 


It will be noted that only one of the three causes of fluctuations 
in the average revenue per ton mile given above is due to an 
actual change in the tariff rates tod the analyst should have this 
point in mind in studying fluctuations in the average revenue per 
ton mile. Changes in tariff rates are a naatter of record in the 
trafiic department and the effect of these changes can Usually 
be estimated with reasonable accuracy. The effect of , tfe other 


two elements in ihe fluctuatibn in the average 


reyeiiue per ton 



36 Analysis of Railroad Operations 

mile is not so easy to determine and in the absence of a separation 
of revenues and ton miles by commodities must ronain largely 
a matter of guess work. 

While these limitations in the statistical records prevent the 
analyst from making a complete study of the causes of fluctuations 
in freight revenues the expense of keeping the records required 
by such an analysis would not usually be justified by the results 
obtained. 

Analysis of the Fluctuations in Account 102 , "Passenger.” 
— Our study of the sources of passenger revenues and flie statistics 
thereof in Chapter IV indicates that the analysis of fluctuations 
in this account presents a much simpler problem to the analyst 
than does the analysis of freight revenues. This is chiefly due 
to the fact that instead of different commodities to consider there 
is only one — the passenger. 

The principal point to determine in the analysis of fluctuations 
in passei^er revenues is the distribution of the fluctuations in the 
total passenger revenues between the different classes of passenger 
traffic, namely: 

1. Local business at regular rates 

2. Through or interline business at r^ular rates 

3. Excursion and other special traffic at reduced rates 

4. Commutation business (at reduced rates) 

The Interstate Commerce Commission requires the railrrads 
to report monthly the separation of passenger revenues, passengers 
carried and pas^nger miles between commutation business and 
all other business, and many roads keep for their own information 
a further separation of the passenger business other than com- 
mutation between local, interline and excursions. 

The analysis of fluctuations in passenger revenues on roads 
which keep a record of the separation of passenger traffic into 
these classes would be as follows : 

1. The increase or decrease in total passenger revenue would 
be distributed to flie classes of traffic responsible therefor. 

2. The causes of the increase or decrease in the revenue "^f 




m 


Fluctuations in Railway Operating Revenues 37 

each class of traffic would be determined — that is, whether it was 
due to a change in traffic (passenger miles), a change in rates 
(revenue per passenger mile), or a combination of both causes. 

a. The causes of changes in passenger miles within each 
class of traffic are usually a matter of record in the passenger 
department where records of the earnings by stations and of 
special passenger movements are maintained. 

b. The causes of changes in the average revenue per passen- 
ger mile within each class of traffic insofar as they represent 
changes in tariff rates, are a matter of record in the passenger 
department. There might also be some fluctuations in the 
average revenue per passenger mile due to varying propor- 
tions of traffic at different rates within the four classes of 
traffic named above. 

Train Mile Earnings. — ^The statistics of freight and passenger 
traffic as reported to the Interstate Commerce Commission include 
the revenue per train mile. A supplementary record of train 
mile earnings by individual passenger trains is also kept on most 
railroads. While these records of train mile earnings are of great 
importance in an analysis of net revenues from freight or pas- 
senger train service, they do not indicate the causes of fluctuations 
in gross revenues. As we have seen, gross revenues depend on the 
amount of tr^c handled and the rate. The number of trains re- 
quired to handle this traffic is hot a factor in the gross although 
all important in the net. 

Revenues per train mile as compared with expenses per train 
mile are of great importance in connection with the analysis of the 
operating ratio. 

This subject is discussed in Chapter VII and we will therefore 
only take up at this point the factors which affect the revenues per 
train mile. 

Revenue per Freight Train Mile. — ^The revenue per frdght 
train mile is obtained by dividing the freight revenue (Account 
101) by the freight train miles and depends directly cm two 
factors:,' 

, ! 1 . The revenue train load (revenue ton miles per train riiiiie). 

■ '^2.''The; averse rate (rey^he'pBrtph:ini'fe),.^;;.-j'.';^^^^ 



38 Analysis of Railroad Operations 

Fluctuations in the revenue per train mile are therefore the 
result of fluctuations in these two factors. 

This relationship is shown by the following table : 

Increase 

Current Previous or Decrease 
Period Period Amount Per Cent 

1. Freight revenue (Ac- 

A AAA ^ A AAA AAA AAA A4 A 


count 101) $ 3,630,000 $ 3,000,000 $ 630,000 21.0 

2. Revenue ton miles 165,000,000 150,000,000 15,000,000 10.0 

3. Freight train miles 300,000 300,000 


Average 

4. Revenue per train mile 

(Item 1-^- Item 3).... $12.10 $10.00 $2.10 21.0 

5. Revenue ton miles per 

train mile (Item 2-^ 

Item 3) 550 500 50 10.0 

6. Revenue per ton mile 

(Item 1 Item 2) . . . . $.022 $.020 $.002 10.0 

In this example we have an increase of $2.10 or 21 per cent in 
revenue per train mile to explain. It is due to a combination of 
an increase of 10 per cent in the revenue train load (revenue ton 
miles per train mile) and 10 per cent in the rate (average rev- 
enue per ton mile). 

The analysis of fluctuations in the revenue train load in freight 
service is discussed in detail in Chapter XV, 

Revenue per Passenger Train Mile. — ^The revenue per pas- 
senger train mile consists chiefly of passenger revenue (Account 
102) but there is also some revenue derived from mail, express, 
milk and other services allied to passenger service and performed 
by passenger trains. 

The statistics of train mile earnings in passenger train service 
therefore contain several more items than those for freight train 
service as shown by the following table, giving a t3rpical analysis 
of passenger train mile earnings. 



Fluctuations in Railway Operating Revenues 39 


Increase 



Current 

Previous 

or Decrease 


Period 

Period 

Amount Per Cent 

1. Passenger revenue (Ac- 

count 102) 

$ 1,350,000 

$ 1,050,000 

$ 300,000 

28.6 

Other Passenger Serv- 
ice Train Revenue 

2. Mail 

$ 120,000 

$ 100,000 

$ 20,000 

20.0 

3. Express 

200,000 

150,000 

50,000 

33.3 

4. Miscellaneous 

40,000 

50,000 

d 10,000 

d20.0 

5. Total other passenger 
service train revenue... 

$ 3^,000 

$ 300,000 

$ 60,000 

20.0 

6. Total passenger service 
train revenue 

$ 1.710,000 

$ 1,350,000 

$ 360,000 

26.7 

7 , Passenger miles 

45,000,000 

35,000,000 

10,000,000 

28.6 

8. Passenger train miles . . 

500,000 

500,000 


9. Passenger train car miles 

2,200,000 

2,000,000 

200,000 

10.0 

10. Average revenue per 

passenger mile 

$ D 3 

$ .03 

.... 

.... 

Average per Train Mile 





11. Passenger miles (passen- 
gers per train) (Item 

7 Item 8) 

90 

70 

20 

28.6 

12. Passenger Revenue (Item 

1 -i- Item 8, also Item 
10 X Item 11) 

$2.70 

$ 2.10 

$ .60 

28.6 

Other Passenger Service 

Train Revenue 

13. Mail (Item 2 -i- Item 8) . 

.24 

.20 

.04 

20.0 

14. Express (Item 3 Item 
8) 

.40 

.30 

.10 

33.3 

15. Miscdlaneous (Item 4 
-4- Item 8) 

.08 

.10 

d .02 

d20.0 

16. Total other passenger 

service tram revenue. 

.72 

.60 

.12 

20.0 

17. Total passenger service 
train revenue 

$ 3.42 

$ 2.70 

$ .72 

26.7 

18. Passenger train car miles 





(cars per train) (Item 

9 -5- Item 8) 

4.4 

4.0 

.4 

10.0 

19. Passenger miles per car 
mile (passengers per 

car) (Item 7 Item 9) 

20.45 

17.50 

2.9S 

16.9 


In the foregoing table it has been assumed ttet the increase of 
28.6 per cent in passenger miles was handled with the same niim- 
b* of tr^ piiles but with ^ increase of 10 per cent in car miles. 



40 Analysis of Railroad Operations 

The points brought out by the statement are as follows: 

1. There was an increase of $.72 or 26.7 per cent in the total 
passenger service train revenue per train mile: $.60 of this in- 
crease was attributable to passenger service and $.12 to the “Allied 
Services.” 

2. The increase of $.60 or 28.6 per cent in passenger revenue per 
train mile was due to the increase of 20 or 28.6 per cent in the 
passengers per train, there being no increase in the rate. The 
statistics further show that this increase in passengers per train 
of 28,6 per cent was accomplished by increasing the number of 
cars per train from 4 to 4.4 or 10 per cent and the number of 
passengers per car from 17.50 to 20.45 or 16.9 per cent. 

Referring again to the formula for combining percentages on 
page 34, 10 per cent + 16.9 per cent = 26.9 per cent 
10 per cent X 16.9 per cent = 1.7 per cent 

28.6 per cent 

On many roads these statistics of train mile earnings are kept 
by individual trains, at least so far as passenger revenues are con- 
cerned. The point should be noted again that these train mile 
earnings do not explain fluctuations in the gross passenger reve- 
nues, which do not depend on the number of trains run, except 
to the extent that travel is stimulated by more train service. The 
factors directly responsible for the fluctuation in passenger reve- 
nues are the passenger miles and the rate as set forth on page 21. 



CHAPTER VI 




RAILWAY OPERATING EXPENSES 

In the foregoing chapters we have studied the principal sources 
from which railroads derive their revenues as recorded in the 
operating revenue accounts, the transportation service performed 
from which these revenues are derived as recorded in the traffic 
statistics, and the methods of analyzing fluctuations by a com- 
parison of these two items. Let us now turn our attention to 
the other side of the picture and study the cost of performing 
the transportation service as recorded in the railway operating 
expense accounts, the statistics of work performed from which 
these expenses arise and the methods of analyzing fluctuations 
in the expenses by comparison of the expenses and appropriate 
statistics of work performed. 

Classification of Operating Expenses.— We have seen that 
the total of railway operating revenues from all sources for the 
accounting period is reported as one item on the income statement 
(Appendix, page 150), namely, in Account SOI, ^‘Railway operat- 
ing revenues,'" and that this general account is divided into sub- 
accounts called operating revenue accounts. In the same way, 
the total of railway operating expenses for the period is given in 
one item on the income statement, namely, in Account 531, “Rail- 
way operating expenses," the details of the various items of 
expense being found in sub-accounts called “Operating expense 
accounts." These accounts are summarized for the accounting 
period on a statement called “Railway operating expenses” which 
forms the principal supporting schedule for Income Account 531, 
“Railway operating expenses." A copy of this schedule for all 
Class I railroads in 1923 is given in the Appendix on j^e 156, 
from which it will be noted that the total, $4,895,166,819, is the 
same as the amount shown for Income Account 531, “R^Way 
operating expenses" on the incoine statement on ISO of the 
Appendix, A ; detailed d^cription of the operating ;^:^ns€ Uc- 




42 


Analysis of Railroad Operations 

counts is given in the “Classification of operating revenues and 
expenses of steam roads” as prescribed by the Interstate Com- 
merce Commission on pages 190 to 289 of the Appendix. 

The reader will observe that this classification of operating ex- 
penses is very voluminous, there being 199 primary accounts in 
which the various items of expense are recorded. When we 
realize that many of these primary accounts can be still further 
subdivided into numerous sub-accounts, we get an idea of the 
countless ways there are for the railroad to spend its money, or 
to put it another way, the countless jobs that have to be performed 
by a railroad in order to transport passengers and freight in safety 
from one point to another. 

General Operating Expense Accounts. — The railway operat- 
ing expenses are classified as to general causes of expense by 
division into the following general accounts, the amounts and 
percentages of each account to the total expenses for Class I 
railroads in 1923 being shown in order that the reader may have 
an idea of the relative importance of each: 

All Class I Railroads 
in 1923 



General Account 

Amount 

Per Cent 
of Total 

I 

Maintenance of Way and Structures 

$ 813,688,760 

16.62 

II 

Maintenance of Equipment 

1,465,156.595 

29.93 

III 

Traffic 

93,976,686 

1.92 

IV 

Transportation — ^Rail Line 

2,309,608,766 

47.18 

V 

Transportation — ^Water Line 

11,674,372 

0.24 

VI 

Miscellaneous Operations 

50,647,090 

1.04 

VII 

General 

162,057,024 

3.31 

VIII 

Transportation for Investment — 
Credit 

— 11,642,474 

-.24 


Total Railway Operating Ex- 

$4,895,166,819 



penses 

100.00 


For purposes of analysis these general accounts may be arranged 
into the following groups in accordance with the general cause 
of the expense: 

Maintenance 

Maintenance of Way ^d Structures 
Maintenance of Equipment 



Railway Operating Expenses '43 

Operation 

Transportation — ^Rail Line 
Transportation — ^Water Line 
Miscellaneous Operations 
Other Expenses 
Traffic 
General 

Transportation for Investment — Credit 

Maintenance Expenses. — Maintenance of Way and Structures 
includes the expenses of maintaining and repairing the roadway 
and track, bridges, building and other structures, etc., which are 
commonly called the fixed property of the railroad, while Main- 
tenance of Equipment includes the expenses of maintaining and 
repairing the locomotives, cars, floating equipment and other 
movable property commonly called the equipment of the railroad. 
Distinction Betwreen Maintenance and Additions and 
Betterments. — A careful distinction is made in the accounting 
between the cost of repairs to existing facilities and equipment 
and the cost of additional or improved facilities and equipment. 
The former is included in the Maintenance of Way and Struc- 
tures and Maintenance of Equipment accounts ; the latter is not 
included in Operating Expenses at all but is added directly to 
the investment account. Expenditures for new locomotives and 
cars, or for additional tracks, buildings, etc., or for improvements 
to existing equipment or fixed property, therefore, do not affect 
the net income of the period. In the old days, however, before 
the Interstate Commerce Commission had prescribed uniform 
methods of accounting for all railroads engaged in interstate com- 
merce, many roads were accustomed to charge operating expenses 
with the cost of new or improved facilities and equipment in good 
years, while similar items were charged directly to investment 
in bad years. Under these conditions, it was difficult to deteimine 
the actual cost of maintaining the property from year to year. 
That situation is past now, thanks to the Interstate Commerce 
Commission, and the amounts included in Maintenance of Way 
and Structures and Maintenance of Equipment fairly represent 
the cost of maintaining the property.. 



44 Analysis of Railroad Operations 

Distinction Between Maintenance and Operation.— Main- 
tenance of Way and Structures and Maintenance of Equipment 
taken together rq)resent the cost of maintaining the property as 
compared with the cost of operating and administering it, as 
included in the other general accounts. While the word “operat- 
ii^,” as used in the account “Railway operating expenses,” in- 
cludes all expenses, viz., maintenance, operation, traffic and general 
administration, it is also frequently used to express the act of 
“running” locomotives, cars and other equipment as well as signals, 
interlockers, drawbridges, stations and other fixed property as 
compared with the “repairing and maintaining” of such equipment 
and facilities. And it is in this latter sense that the term is used 
in the following paragraphs. 

It is important to understand clearly the distinction between 
"maintenance” and “operating” expenses and a few concrete ex- 
amples will help to make this clear. 

The cost of “maintaining” signals and interlockers, that is, 
the cost of labor and materials used in repairing broken parts, 
is charged to Account 249, “Signals and interlockers,” under the 
general account. Maintenance of Way and Structures. The cost 
of "operating” these signals and interlockers, that is, the pay of 
the towermen and others who pull the levers, and throw the signals 
and switches in connection with the operation of locopiotives and 
trains, is chaiged to Account 404, “Signal and interlocker opera- 
tion,” under the general account Transportation — ^Rail line. 

The cost of maintaining steam locomotives, that is, the cost 
of repairing or replacing broken parts, is charged to Account 308, 
“Steam locomotives — repairs,” while the cost of despatching, viz., 
preparing the locomotives for service, which includes the pay 
of the men engaged in wipit^, dumping ashes, washing boilers, 
packing journal boxes, etc., is charged to Account 388, “Engine- 
house expenses— yard,” or Account 400, “Enginehouse expenses 
— strain,” according to the service in which the locomotive is 
engaged. Light or running repairs are made by rcmndhouse forces 
in connection with preparing a locomotive for service and the 
mechanics dr their helpers who are primarily engaged in repair 
work may also spend part of their time in packing journal boxes, 
or in other work not chargeable to repairs. In any ev^t, the 





Railway Operating Expenses 45 

cost of the repair work by whomever performed is included in 
Maintenance of Equipment expenses while the cost of preparing 
the locomotives for service is included in Transportation — Rail 
line. 

Operation. — ^The expenses of ^‘operating*’ the property as com- 
pared with the expenses of maintaining it are included in the 
three general accounts named below: 

Transportation — ^Rail line 
Transportation — ^Water line 
Miscellaneous Operations 

The most important of these accounts is Transportation — ^Rail 
line, which includes the cost of operating the locomotives and 
trains and the stations, signals, interlpckers, and other fixed prop- 
erty in connection with performing the transportation service. 

Transportation — ^Water line is only found on a few roads 
which operate directly steamship lines between ports, the revenues 
from which are included in Water line revenues as explained m 
Chapter III, page 17, 

Miscellaneous Operations include the cost of operating dining 
cars (but not the cost of repairing and maintaining these cars 
which is included in Maintenance of Equipment) ; the cost of 
operating hotels and restaurants at stations; also miscellaneous 
operations like grain elevators, stock yards, etc., the revenue from 
which is included in Incidental Revenues as explained, in Chap- 
ter III^ page 18. 

Other Expenses. — ^We now come to the third group of ex- 
penses, which represents a very small proportion of the total, only 
5 per cent on Class I roads in 1923. The activities from which 
these expenses arise, however, are vitally important to the suc- 
cessful operation of the railroad. This group includes the fpl* 
lowing general accounts : 

Traffic 

General 

Transportation for Investment — Credit 


Traffic.~Traffic expenses coyer the expenses pf the tr^c 
department which is .responsible for the solidtetiqn^^^p^^ 




46 Analysis of Railroad Operations 

the determination of the rates to be charged for the various 
services performed by the railroad and the preparation and dis- 
tribution of tariffs in which these rates are published; also the 
negotiations with other carriers for a proper division of through 
rates covering service performed jointly with them and similar 
activities. 

General. — General expenses include the expenses of the execu- 
tive departments, that is, salaries and expenses of the president 
and vice-presidents and their assistants, having general super- 
vision over all the activities of the railroad. On these officials 
depend the successful coordination of the work of the other 
departments. Included in general expenses are the expenses of 
other departments at the general offices, such as the treasury 
department which has general jurisdiction over the receipt and 
disbursement of cash; the accounting department which audits 
the financial transactions of the railroad, records its activities in 
the accounts and statistics and prepares the financial and statisti- 
cal statements summarizing these activities; the legal department 
which has charge of l^al matters ; and other departments whose 
work is of a general nature. 

Transportation for Investment — Credit. — ^This account rep- 
resents the amount deducted from total expenses to cover the 
cost of transporting on transportation service trains men and 
material engaged in the construction of new property or improve- 
ments to existing property (additions and betterments), the cost 
of which is charged to capital account as previously ^plained. 
The amounts included in this account which are deducted from 
operating expenses are added to the cost of the work, as included 
in the investment accounts. The Interstate Commerce Com- 
mission has not prescribed the basis on which the cost of trans- 
porting men and material used in construction shall be ascertained 
and the basis used varies on different railroads. The total amount 
of this credit to operating expenses is not large, however, being 
only 0.2 per cent of the total operating expenses of Qass I rail- 
roads in 1923. 

General Character of Itenas Included in Expenses.— The 
expenses are classified as to general causes by division into the. 
general operating expense accounts as described in the foregoing 



4 ) 


Railway Operating Ejirpeftses 47 

paragraphs. The amounts included in these accounts consist of 
the following elements of expense : 

Cost of labor performed by the forces of the railroad 

Cost of material and supplies 

Miscellaneous expense : * 

Pa3ments for services performed by other than railroad forces 

Payments of claims for personal injury and loss and damage to 
property 

Miscellaneous items such as power and light purchased, station- 
ery and other office supplies and expenses, advertising, print- 
ing tariffs, etc. 

In addition to these elements of expense which represent actual 
cash outlay, the maintenance expenses include bookkeeping charges 
for depreciation and retirements as hereafter described. 

Depreciation and Retirements.— When a unit of fixed prop- 
erty or equipment, such as a bridge, building or other structure, 
or a locomotive or car is built or purchased by a railroad, the cost 
thereof, called the book value, is included in the assets of the 
company in its investment account. The cost of repairing the 
unit is charged to maintenance expenses, so that the original book 
value does not change during the life of the unit unless some 
additions or improvements are made thereto, in which case the 
cost of these changes is added to the original book value. 

It is apparent, however, that the true or market value of the 
unit (after making allowances for changes in the purchasing power 
of the dollar) grows less as its age increases even when kept in 
good repair. A second-hand locomotive, like any other article, 
is not worth as much as a new one of the same kind. While with 
proper care its life may be prolonged for many years, it eventually 
becomes worn out like the ''one boss shay'' and has to be taken 
out of service, or as more often happens, it becomes obsolete be- 
fore being actually worn out and is replaced by a new and im- 
proved type. 

Whatever the cause of the final withdrawal from service, the 
value of the unit when retired is only the amount that atn be 
realized from its sale as a second-himd atlicle or as strap. The 



48 Analysis of Railroad Operations 

difference between this amount and the book value represents a 
loss in the value of the assets of the company. As the book value 
of these assets represents the original investment of funds for 
which the company is responsible, it is necessary that the loss in 
the value of the unit as included in the assets shall be offset by 
other assets of like amount if the value of the original investment 
is to be protected. 

This situation is met by including in expenses and, thus, auto- 
matically withholding from the net income or profits of the com- 
pany, an amount sufficient to offset this loss in the value of the 
assets when the unit is withdrawn from service, and the book 
value thereof deducted from the investment account. The reserve 
thus created, which may be held in cash or invested in other assets, 
plus the amount realized from the sale of the unit as second hand 
or scrap, will thus equal the book value of the unit as included 
in the assets of the company. Consequently, when the unit of 
property is retired and its book value is deducted from the assets, 
the amount of this deduction is offset by other assets of like 
amount and the original value of the assets of the company is 
not reduced by the retirement of the unit in question. 

The amounts thus included in expenses to offset the loss in value 
of units of fixed property or equipment when retired are called 
charges to “depreciation” when made in advance on an estimated 
basis to anticipate the loss, and charges to “retirements” when 
made at the time the unit is retired and the actual loss has been 
ascertained. When no charges have been made for depreciation 
during the life of the unit, the entire loss is recorded in the 
charges to retirements. When charges to depreciation have been 
made currently during the life of the unit, the loss is divided be- 
tween the charges to depreciation and the charges to retirements, 
the amount included in retirements representing an adjustment 
of the depreciation charges to the proper amount. 

Depreciation charges on a unit of fixed property or equipment 
are supposed to cease when the reserve thus created plus the esti- 
mated salvage equals the book value of the unit . It sometimes, 
happens,, however, that the salvage value is tinder-estimated and- 
the unit is overdepreciated, so that the adjustment of deprecia^^; ■ 
tion charges consists of a[ credit to retirements. . \ 



Railway Operating Expenses 49 

The accounting rules of the Interstate Conunerce Commission 
require that depreciation shall be accrued currently on equipment 
but leave the question of accruing depreciation on fixed property 
optional with the railroad. As a result only a few railroads 
make it a practice to accrue depreciation currently on fixed prop- 
erty, preferring to charge off the entire loss to retirements when 
the unit is retired and the actual loss has been ascertained. 

The practical working out of the accounting for depreciation 
and retirements is set forth in detail in Chapter X, page 84, in 
connection with maintenance of equipment expenses. 

Purpose of the Primary Expense Accounts. — ^Each of the 
general expense accounts except Transportation for Investment — 
Credit is divided into numerous primary accounts which record 
either individually or in groups the primary cause of the expense 
such as the maintenance of bridges, trestles and culverts, roadway 
and track, locomotives and cars, etc., or the operation of stations, 
yard locomotives, trains, etc. These primary accounts ha,ve also 
been classified to show in all cases in separate accounts the charges 
for depreciation of fixed property and for both depreciation and 
retirements of equipment. The extent to which labor, material 
and other elements of expense are segregated in individual pri- 
mary accounts varies in the different groups and will be, discussed 
in the detailed study of the accounts which follows. 

While the separation of the primary accounts into the various 
elements of exprase outlined herein is not available from the 
operating expense statements issued by the accounting department 
and included in the Annual Report to the Interstate Commerce 
Cbmmission, it can always be obtained from thp underlying 
records of the accounting department. 



CHAPTER VII 


ANALYSIS OF FLUCTUATIONS IN RAILWAY 
OPERATING EXPENSES. 

From the brief review of the items included in operating ex- 
penses as set forth in the previous chapter, it is evident that an 
analysis of the causes of fluctuations in the expenses of one period 
as compared with those of another period is somewhat more com- 
plicated than an analysis of the fluctuations in revenues. 

Comparison of Analysis of Fluctuations in Revenues and 
Expenses. — The revenues are divided into 39 primary revenue 
accounts as compared with 199 primary expense accounts. While 
90 per cent of the revenues are usually included in the two ac- 
counts, 101, ‘‘Freight,” and 102, “Passenger,” the twenty largest 
expense accounts only make up about 75 per cent of the total 
expenses. 

Furthermore, the amounts included in these two revenue ac- 
counts depend upon two factors only: the amount of service 
performed and the rate. Except when general changes in freight 
or passenger rates are ordered by the Interstate Commerce Com- 
mission, the fluctuations in the revenues of a railroad may be 
said to depend primarily upon the fluctuations in the quantity and 
character of the transportation service performed. 

Relation Between Revenues and Expenses. — The fluctua- 
tions in the expenses on the other hand are governed to only a 
limited extent by these fluctuations in service performed. While 
the revenue which a railroad will receive for performing any 
specified amount of transportation service is definitely established 
in advance, the cost of perf orming that service is not fixed. Con- 
sequently, the amounts included in the expenses of the period 
have no fixed relation to the revenues or the quantity of service 
performed during the period. 

This relation or rather lack of relation between the expenses, 
and the. revenues of a period is due primarily to the general 

50 - ■ . ■ ■ ■ 



„ '^1 ) y € 

Fluctuations in Railway Operating Expenses 51 

character of the railroad business. Instead of being able to manu- 
facture transportation on order, and shut down the shop when 
business falls off, a railroad has to plan and carry out a program 
of expenditures for the maintenance and operation of its property 
and incur the major part of the cost of producing transportation 
without regard to fluctuations in the amount of transportation 
service actually produced from which its revenues are derived. 

For example, the expenses of the traffic and executive depart- 
ments and the cost of supervision in the maintenance and 
operating departments are not affected by ordinary fluctuations 
in ton miles and passenger miles. The same is true of the 
regular organization of agents and operators at stations and 
terminals, towermen, crossing flagmen, drawbridge operators, etc, 

A large part of the regular railroad organization consists of 
employees specially trained in their particular branch of the work 
and a railroad therefore finds it advantageous to keep this regular 
organization intact so far as possible in times of light business, 
so that it can handle the peak loads of business with the greatest 
possible efficiency. As a result of this policy, wide fluctuations 
in business are frequently handled with slight changes in the 
permanent organization. 

Furthermore, a large part of the cost of maintaining the road- 
way and track, bridges, buildings, and other fixed property arises 
from natural decay and not from the use made of the property, 
and the same is true of the maintenance of locomotives and cars 
although to a lesser degree. 

Modifications in the maintenance program and reductions in 
the forces of the permanent organization frequently occur during 
periods of general depression, particularly on railroads in a weak 
financial condition. While these reductions in expenses are in a 
sense caused by the reductions in revenues, they do not, so far 
as maintenance is concerned, represent a reduction in the require- 
ments for repairs but merely the deferring of this work until busi- 
ness picks up and the financial condition of the company improves. 

The expenses which are most closely related to the ton miles 
and passenger miles are those directly occasioned by the movement 
of the trains in which the passengers and freight are transported 
and other transpoitetion service is p^fonued. 



52 Analysis of Railroad Operations 

The relation between the fluctuations in expense and the fluctua- 
tions in traffic is closer in the case of freight train service than in 
the case of passenger train service. It is not necessary to run 
most of the freight trains until enough freight to make up a train 
load is actually offered for shipment. Passenger trains, on the 
other hand, are run on a fixed schedule which is published in 
advance and these regular passenger trains cannot be put on and 
taken off from day to day in accordance with fluctuations in pas- 
senger travel. 

It is evident, therefore, that fluctuations in expenses are for the 
most part only indirectly related to fluctuations in revenues and 
that while the fluctuations in revenues are primarily the result 
of fluctuations in the ton miles and passenger miles, the fluctuations 
in expenses depend upon other factors. These factors vary 
according to the character of the expense, there being no one 
factor which applies with equal force to the expenses of main- 
tenance, operation and administration. It will therefore be neces- 
sary to study the expenses included under each general account 
separately and determine the most practical method of analyzing 
the causes for fluctuations in the expenses of each group. 

This detailed analysis, however, should be preceded by a com- 
parison of the fluctuations in the general expense accounts and 
the relation of these accounts to the revenue accounts in each 
period. The net result of these fluctuations in revenues and 
expenses is expressed by the change in the net railway operating 
income. 

Such a statement gives the analyst the '^high spots” of the situa- 
tion and indicates the direction in which his energies can be most 
profitably expended in the detailed analysis of fluctuations in the 
primary accounts. 

The Operating Ratio. — The relation between the revenues 
and expenses in one period as compared with another is expressed 
by the operating ratio. This index is obtained by dividing the to-, 
tal expenses by the total revenues and is in effect the percentage 
relation of the expenses to the revenues. Expressed in other terms 
the operating ratio is the cost of producing $1.00 of revenue. 
This ratio or cost may be divide between the various general and 
primary -expense accounts to determine the relative importance of 



Fluctuations in Raihvay Operating Expenses 53 

each item in the cost of producing the revenues and is an important 
part of a general summary of operating results. 

On page 11 it was pointed out that the operating ratio, based 
on railway operating expenses only, is not the inclusive measure 
of the operating cost of producing $1.00 of revenue, because it 
does not include taxes, equipment rents and joint facility rents, 
which must be deducted in arriving at the net return from trans- 
portation operations, namely : Net Railway Operating Income. In 
the following table the operating ratio based on operating expenses 
is shown and also the more inclusive ratio, or cost per $1.00 of 
revenue, based on operating expenses, taxes, equipment rents and 
joint facility rents. The figures for Class I railroads in 1922 and 
1923 are given to illustrate the use of these ratios or costs per 
$1.00 of revenue in analyzing the operating results in two periods. 

The relation between the fluctuations in revenues and in ex- 
penses is expressed by the following table in two ways : 

First, by a comparison of the percentages of increase or decrease 
in revenues with the percentages of increase or decrease in ex- 
penses, and 

Second, by a comparison of the ratios or cost per $1.00 of 
revenue for each class of expenses in each period. 

It will be noted that those items of expense for which the 
percentage of increase is smaller than the percentage of increase 
in revenues show a decrease in the ratio or cost per $1.00 of 
revenue, whereas those items for which the percentage of increase 
is greater than the percentage of increase in revenues show an 
increase in the ratio. 

The net result of the fluctuations in the revenues and expenses 
is found in the fluctuations in /'net railway operating income.” 
The aim of the operating official is, of course, to so control 
expenses that the greatest possible portion of an increase and 
the smallest possible portion of a decrease in gross revenues , is 
carried through to the net. There is a tendency to consider 
a performance normal in this respect if expenses increase or 
decrease in the s^e proportion as revenues, the operating latio 
remaining the same. We have seen, however, that the nature 



4 

54 Analysis of Railroad Operations 

TOTAL RAILWAY OPERATING REVENUES AND RAILWAY OPERATING EXPENSES BY 
GENERAL ACCOUNTS : RATIOS OF EXPENSES TO REVENUES 

Class I Railroads 

Calendar Year 1923 Compared with 1922 

Increase or Decrease 
Per 

1923 1922 Amount Cent 

Total Railway Operat- 
ing Revenues $6,289,580,027 $5,559,092,708 $730,487,319 13.1 

Railway Operating 
Expenses 

Maintenance 


Maintenance of way 

and structures .... 813,688,760 728,663,534 85,025,226 11.7 

Maintenance of equip- 
ment 1,465,156,595 1,252,517,250 212,639,345 17.0 

Operation 

Transportation — Rail 

line 2,309,608,766 2,140,149,596 169,459,170 7.9 

Transportation -—Wa- 
ter line 11,674,372 9,614,227 2,060,145 21.4 

Miscellaneous opera- 
tions 50,647,090 47,653,795 2,993,295 6.3 

Other Expenses 

Traffic expenses 93,976,686 86,506,907 7,469,779 8.6 

General expenses .... 162,057,024 156,705,481 5,351,543 3.4 

Transportation for in- 
vestment— Credit .. ^11,642,474 — 7,288,456 — 4,354,018 — 59.7 

Total railway operat- 
ing expenses $4,895,166,819 $4,414,522,334 $480,644,485 10.9 

Taxes and Uncol- 

enues $ 333,857,117 $ 302,497,446 $ 31,359,671 10.4 

Equipment rents— Net 

debit 73,884,508 59,543,325 14,341,183 24.1 

Joint facility rents— 

Net debit 24,716,127 22,342,284 2,373,843 10.6 

Total expenses, taxes 

and rents $5,327,624>571 $4,798,905,389 $528,719,182 11.0 


Net railway operat- 
ing income 961,955,456 $ 760,187,319 $201,768,137 26i 



Fluctmlions in Railway Operating Expenses 55 


Ratio of Expenses to 
Revenues or Costs 
in Cents per $1.00 

of Revenue 1923 1922 Increase or Decrease 

Maintenance 
Maintenance of way 

and structures 12.94 13.11 —-.17 

Maintenance of equip- 
ment 23.29 22.53 .76 

Operation 

Transportation — Rail 

line 36.72 38.50 — 1.78 

T ransportation — Wa- 
ter line .18 .17 .01 

Miscellaneous opera- 
tions .81 .86 •— .05 

Other Expenses 

Traffic expenses ..... 1.49 1.55 — .06 

General expenses .... 2.58 2.82 — .24 

Transportation for in- 
vestment — Credit .. — .18 — .13 — .05 

Total railway operat- 
ing expenses — Oper- 
ating Ratio 77.83 79.41 — 1.58 

Taxes and uncollec- 
tible railway reve- 
nues 5.31 5.44 — .13 

Equipment rents — ^Net 

debit 1.17 1.07 .10 

Joint facility rents — 

Net debit ,40 .40 

Total expenses, taxes 

and rents 84.71 86.32 -^1.61 


of the railroad business is such that the greater part of the ex- 
penses do not normally fluctuate in the same proportion as the 
revenues, being controlled by other factors than fluctuations in 
traffic. The normal performance is therefore to have expenses 
increase or decrease at a slower rate than the revenues. Con- 
sequently the ratio or cost per $1.00 of revenue should decrease 
when business improves and increase when business falls off. 

In the table given above, we have an example of the normal 
performance in this respect taking the operations as a whole. 
Revenues increased 13 per cent while expenses increased only 11 
per cent ; the inclusive ratio or cost of producing $1.00 of revenue 
being reduced from 86,32 to 84.71. The increase in the main- 



56 Analysis of Railroad Operations 

tenance of equipment ratio, therefore, indicates something out of 
line in that department. 

While this inclusive ratio is a significant index of the relative 
cost of producing revenues on different roads in the same period 
or on the same road in different periods and is therefore an index 
of the relative efficiency of the property as a producer of net 
railway operating income during these periods, it is not a reli- 
able index of the relative efficiency of the management. This is 
partly due to the fact that the ratio depends on the relation be- 
tween the revenues and expenses and is affected as much by the 
rates at which traffic is transported as by the unit cost of pro- 
ducing the service. High operating costs due to inefficient man- 
agement may be offset by relatively higher rates, and the less effi- 
cient management may thus be credited with the lower ratio. 

This is illustrated by the following example in which one class 
of service is assumed for the sake of simplicity : 


Current Previous 

Period Period 

1. Revenue Ton Miles 1,000,000 1,000,000 

2. Revenues 200,000 160,000 

3. Expenses 140,000 120,000 

4. Revenue per Ton Mile 2.00c. 1.60c. 

5. Expenses per Ton Mile 1.40c. 1.20c. 

6. Ratio of expenses to revenues (Item 

3 - 5 - Item 2) also (Item 5 Item 4) 70 75 


This example shows the effect of a high rate on the operating 
ratio, which decreased in spite of an increase in the cost per ton 
mile. 

Furthermore, as previously pointed out, the expenses of main- 
tenance and administration and a part of the expenses of operation 
are not directly related to the transportation service performed. 
Consequently, substantial fluctuations in revenues may be accom- 
panied by only minor fluctuations in these expenses. Under these 
conditions with the same efficiency of management, increases in 
revenues result in decreases in the ratios of these expenses to 
revenues and vice-versa. 

Analysis of Fluctuations in the Ratio of Train Expenses 
to Revenues. — ^The expenses of train operation, particularly in 
freight train service are more closely related to the revenues than 



Fltichiations in Railway Operating Expenses 57 

are the other expenses. The fluctuations in expenses of train 
operation should normally quite closely correspond to the fluctua- 
tions in revenues, the ratio of the expenses to the revenues remain- 
ing constant. Consequently, fluctuations in the ratio of these 
expenses of train operation to revenues are much more significant 
than fluctuations in the ratios of the other expenses and indicate 
a change in conditions which should be investigated. 

This change in conditions may be a change in the rates per 
unit of service performed, a change in the unit cost, or a com- 
bination of the two items as indicated in the example on page 58. 

In order to analyze fluctuations in the ratio of the expenses of 
train operation it is necessary to separate the cost of freight train 
service from the cost of passenger train service and compare each 
with the revenues from the respective services. 

The Interstate Commerce Commission requires the separation 
of all operating expenses between freight service and passenger 
and allied services in accordance with the rules for the separation 
of expenses between freight and passenger. This information 
is given on Schedule 320 of the Annual Report of each railroad 
to the Interstate Commerce Commission. The separation of the 
expenses of train operation was also reported monthly to the 
Commission on Form OSC Locomotive and Train Costs, but this 
report was discontinued with the report for December, 1924. The 
items included in the expenses of train operation are given on 
page 119. 

Having separated the expenses of train operation between 
freight and passenger and allied services, we are now ready to 
compare the revenues and expenses per train mile in each service 
and determine the effect on the operating ratio of fluctuations in 
these items. 

Taking freight train service first, the following example gives 
a comparison of the various items in the two periods, the revenue 
and train miles being taken from the example on page 38. 



58 Analysis of Railroad Operations 

Increase or Decrease 
Current Previous Per 

Period Period Amount Cent 

1. Freight revenue (Ac- 

count 101) ....... $3,630,000 $3,000,000 $630,000 21.0 

2. Expenses of freight 

train operation . . . 363,000 330,000 33,000 10.0 

3. Freight train miles. . 300,000 300,000 

Averages 

4. Revenue per train 

mile (Item 1 

Item 3) $12.10 $10.00 $2.10 21.0 

5. Expenses per train 

mile (Item 2 

Item 3) 1J21 1.10 .11 10.0 

6. Ratio of expenses to 

revenues or cost of 

train operation per 

$1.00 of revenue 

(Item 2 H- Item 1 

also Item 5 

Item4) .10 .11 d— .01 d9.1 

In the example given above, we have a decrease in the ratio of 
train expenses to revenues, or, in other words, the cost of train 
operation per $1.00 of revenue of 9.1 per cent, which is due to 
an increase of 21.0 per cent in revenues accompanied by an in- 
crease of only 10.0 per cent in expenses. As there was no change 
in the train miles the same percentages apply to the revenues and 
expenses per train mile. 

Stated in other terms, the operating department by increasing 
the revenue train load 10 per cent, was able to handle an increase 
of 10 per cent in ton miles with the same number of train miles. 
On the other hand this increase of 10 per cent in the train load 
was accompanied by an increase of 10 per cent in the cost per train 
mile, so there was no saving in the cost per ton mile from the 
increased train load. There was, however, an increase of 10 
per cent in the average revenue per ton mile, which may in this 
case be said to have been the direct cause of the reduction in the 
cost of train operation per $1.00 of revenue. [See page 38 for 
the increase in revenue train load and revenue per ton mile.] 

The relation between the revenues and expenses per train mile 
in passenger train service and the effect of fluctuations in these 
items on the cost of ttain operation per $1.00 of revenue are de- 



Fluctuations in Railway Operating Expenses 59 

veloped in the same manner as that outlined above for freight 
train operation. 

The analysis of the causes of fluctuations in the revenue per 
train mile is usually made in connection with the traffic statistics, 
although, as we have seen, it has no relation to fluctuations in the 
gross revenues. The analysis of the causes of fluctuations in the 
expenses per train mile is made in connection with the study of 
the unit costs of train operation, which is discussed in Chapter 
XIV. The analysis of the causes of fluctuations in the ratio of 
train expenses to revenues, therefore, is dependent on the results 
of these two studies. 



CHAPTER VIII 


ANALYSIS OF FLUCTUATIONS IN MAINTE- 
NANCE OF WAY AND STRUCTURES 
EXPENSES 

One of the principal items of expense in producing transporta- 
tion is the cost of maintaining the fixed property or Maintenance 
of Way Structures, as it is called in the accounts. By reference 
to the schedule of Railway Operating Expenses of Class I railroads 
on page 204 of the Appendix it will be noted that this general 
account is divided into 80 primary accounts. The titles of these 
primary accounts indicate in most cases the cause of the expense ; 
that is, the kind of fixed property maintained, the cost of which 
is included in that particular account. For example, Account 208, 
“Bridges, trestles and culverts;'^ Account 233, “Fuel stations 
Account 249, “Signals and interlockers;” etc. It will also be 
noted that separate primary accounts are established for the 
depreciation accruals for each of these items of fixed property. 
All of the other elements of maintenance expense applicable 
thereto, namely, labor, material, miscellaneous expenditures and 
charges for retirements, are included in the single amount shown 
opposite the main repair account except in the case of the accounts 
covering the maintenance of roadway and track, for which sepa- 
rate accounts are provided for labor and material items. Separate 
accounts have also been provided for a number of general items 
of expense not applicable to any particular kind of fixed property 
such as superintendence, injuries to persons, stationery and print- 
ing, etc. 

Grouping of Primary Expense Accounts. — In analyzing the 
fluctuations in the cost of maintaining the fixed property of “a rail- 
road, the first step is to rearrange the primary accounts for each 
period into the following groups; 



Maintenance of Way and Structures Expenses 6i 

1. Repairs 

2. Depreciation 

3. Supervision and miscellaneous 

4. Joint facilities 


This rearrangement of the primary maintenance of way accounts 
is given on page 161 of the Appendix, the amount for each account 
being the same as in the statement of railway operating expenses 
on page 156 of the Appendix. A summary of this statement by the 
various groups of accounts is given below and presents in con- 
densed form the principal items of maintenance of way and struc- 
tures expenses. 



Class I Roads in 1923 

■ 


Per Cent 

Repairs 

Amount 

of Total 

Track material 

$209,654,414 

25.77 

Track laying and surfacing 

209,605,688 

25.76 

Roadway maintenance 

Tunnels, bridges and elevated struc- 

133,683,891 

16.43 

tures 

45,867,053 

5.64 

Buildings and other structures 

90,931,005 

11.17 

Signals 

36,869,608 

4.53 

Power plants and transmission system 

3,918,196 

.48 

Total repairs 

Depreciation (all accounts) 

$730,529,855 

89.78 

8,364,790 

1.03 

Supervision and miscellaneous 

65,167,490 

8.01 

Joint facilities 

9,626,625 

L18 

Total maintenance of way and 

$813,688,760 


structures 

100.00 


With the primary accounts of each period arranged by groups 
and summarized in the manner shown above, tlie amount and 
percentage of the fluctuations for each account and group of ac- 
counts in the “current” period as compared with the “previous” 
period is next determined. This done, we are ready to proceed 
with the second part of the analysis, namely, the study of the 
causes of the principal fluctuations. 

The word principal is used advisedly because the analyst has a 
long road to travel and should not pay much attention tq minor 
fluctuations until he has covered the principal fluctuations for all 
groups of operating expenses. 



62 Analysis of Railroad Operations 

The table on page 61 indicates that the repair accounts consti- 
tute 90 per cent of the total maintenance of way and structures 
expenses and our principal attention, therefore, will be given to 
the methods of analyzing fluctuations in this group. Before taking 
up this study, however, let us review briefly the character of the 
items included in the other groups and the methods of analyzing 
fluctuations therein. 

Depreciation. — ^The purpose of the depreciation accounts was 
explained on page 48. The amounts included in these accounts 
depend upon the rate of depreciation and the value to which it 
is applied. Fluctuations in these accounts, therefore, are the 
result of changes in these two factors. As only a few roads accrue 
depreciation on fixed property these accounts ordinarily need not 
be considered in an analysis of maintenance of way and sttuctures. 

Supervision and Miscellaneous. — ^The principal account in 
the group entitled ^'Supervision and miscellaneous'* is Account 201, 
"Superintendence," which includes the salaries and expenses of 
the officers in direct charge of the maintenance of fixed property, 
the salaries and expenses of their clerks and attendants, and office 
expenses. Fluctuations in this account are due chiefly to changes 
in these forces or in their rates of pay. The fluctuations in the 
other accounts in this group are not ordinarily of much impor- 
tance. If any unusual changes are noted, the details can be 
obtained from the accounting department. 

Equalization of Expenses. — Special attention is directed to 
the account entitled "Equalization of expenses," because of the fact 
that the Interstate Commerce Commission by order of June 2, 
1924, effective January 1, 1924, canceled Section 19 of the special 
instructions in the Classification of Operating Revenues and 
Operating Expenses of Steam Roads Issue of 1914, relating to 
equalization of expenses, and issued an amended Section 19 (see 
page 288 of the Appendix). 

Under this amendment the Account 280, Equalization — Way 
and Structures, is used by roads which adopt an annual budget 
of maintenance expenditures to balance the actual monthly expen- 
ditures as recorded in the appropriate primary accounts with 1/12 
of the budget, the difference being charged or credited, as the case 
may be, to Account 280, Equalization— Way and Stnictures. At 



Maintenance of Way and Structures Expenses 63 

the end of the year any diiference between the actual expenses 
and the budget is cleared through this account, which therefore 
is blank for the twelve months’ period. 

Under the previous accounting the uniform monthly accruals 
based on the annual budget were included in the various primary 
accounts, while any difference between these accruals and the 
actual expenditures for the year was charged or credited, as the 
case might be, to equalization. This is, therefore, the explanation 
of the amount shown after equalization in the tables for 1923. 

The working out of equalization under the revised accounting 
instructions is shown in the following example : 

Annual Budget for Ties $1,200,000 


Account 280 
Account 212 Equalization 

Ties Way and Total Include 

Month (Actual Expenditures) Structures in Expenses 

January $ 10,000 $90,000 $ 100,000 

February 10,000 90,000 100,000 

March 40,000 60,000 100,000 

April 110,000 Cr. 10,000 100,000 

120,000 Cr. 20,000 100,000 

June 300,000 Cr. 200,000 100,000 

July 250,000 Cr. 150,000 100,000 

August 190,000 Cr. 90,000 100,000 

September 90,000 10,000 100, WO 

October 60,000 40,000 100,000 

November 30,000 70,000 100,000 

Total 11 Months... $1,210,000 Cr.$lia000 $U00,000 

December- 20,000 110,000 130,000 


Total 12 Months... $1,230,000 $1,230,000 

In the example given above the actual expenses for eleven 
months were $1,210,000 or $110,000 in excess of the budget for 
eleven months, viz., $1,100,000, which was the amount included 
in operating expenses. The net total of the debits and credits 
to Account 280 for eleven months was therefore a credit of 
$110,000. The actual expenditure in December was $20,000, 
making a total actual expenditure for the year of $1,230,000. In 
order to clear out the credits to equalization and have the total 
amount included in the expenses for the year equal the actual 
expenses, viz., $1,230,000, it was necessary to charge $110,000 



64 Analysis of Railroad Operations 

to equalization, making a total of $130,000 included in expenses for 
December. 

The general purpose of the equalization accounts is to avoid 
the wide fluctuations in total maintenance of way expenses from 
month to month that would otherwise occur on most railroads 
because of weather conditions in winter months preventing tie 
renewals and other maintenance work. At the same time, the 
actual expenditures from 'month to month are given in the pri- 
mary accounts. 

Joint Facility Accounts. — ^The purposes of the joint facility 
accounts are as follows : 

The debit account for an individual railroad represents the 
amounts which that railroad pays to others for its share of the 
cost of maintaining facilities, which it uses jointly with other 
railroads and which are maintained by one of the other rail- 
roads. 

The credit account represents the amounts which a railroad 
which maintains facilities used jointly with others receives from 
the other users as their share of the expense. The total cost of 
maintaining these joint facilities is included by the railroad main- 
taining them in the appropriate primary repair account and the 
amount which it receives from others and includes in the joint 
facility credit account serves to reduce the total maintenance of 
way and structure expense. These credits, however, are not dis- 
tributed to the various primary accounts to which the total cost 
was originally charged. 

Fluctuations in the joint facility accounts depend upon the use 
made of the various facilities, the details being available from* the 
bills on file in the accounting department. 

Division of Repair Accounts as Between Labor, Material, 
Miscellaneous Expense and Retirements. — Turning now to 
the repair accounts the first step is a division of the amounts 
included therein among the following items of expense : 

Labor 

Material and supplies 
Miscellaneous expense 
Retirements ;; 



Maintenance of Way and Structures Expenses 65 

This information is not given in the published reports of the 
railroads, but is available from the records of the accounting 
department, and may be classified as follows : 

Under labor are included the amounts paid the railroad's own 
employees for the time engaged in repairs to the particular kind 
of fixed property covered by the account. This item does not 
include the labor of employees operating work trains and steam 
shovels, pile drivers and other machinery used in repair work 
wiiich is included in miscellaneous expense. 

Under material and supplies is included the cost of the material 
and supplies used in repair work by the forces of the railroad. 
The cost of material and supplies is made up of the invoice price, 
plus freight charges on foreign lines, but does not include the cost 
of transportation over the line of the railroad using the material. 
This item also includes the cost of inspection and loading and a 
proportion of the expense of purchasing and handling material 
called ‘‘Store Expense.” 

Miscellaneous expense includes the cost of operating work trains 
and the special machines above referred to; repair work performed 
by outside forces under contract, instead of by the railroad's own 
forces, and miscellaneous expenditures connected with the work 
which are not includable under labor or material. 

The character of the charges to retirements was explained on, 
page 47; these charges being in effect the final adjustment of 
the loss in assets in connection with the retirement of property 
not previously anticipated by charges to the depreciation accounts. 
In this connection it should be noted that the accounting rules 
of the Commission provide that this retirement charge is made to 
maintenance expenses, when a unit of fixed property is retired 
and replaced with another unit of like purpose. When, however, 
the retired unit of property is not replaced, the loss is charged to 
profit and loss instead of to expenses. 

The accounting rules further provide that when the repairs to a 
unit of fixed property are so extensive as to constitute the major 
portion of its value when, renewed, the old unit will be considered 
as entirely retired and replaced with a new unit and ^counted for 
accordingly. 

The practice i^^sult of these rules is to take out of the labor 



66 Analysis of Railroad Operations 

and material charges to maintenance expenses, the cost of heavy 
repair work of this nature; on the other hand, an amount is 
included in expenses, under the heading of retirements, which 
represents the depreciation in value of the retired unit not already 
anticipated by charges to depreciation. If it has been the 
practice of the railroad to accrue depreciation currently on its 
fixed property, the amount included in expenses for these heavy 
repairs, at the time they were actually made, might be very small. 
On the other hand, if, as is common practice, no depreciation has 
been accrued on fixed property, the amount included in main- 
tenance expenses under retirements in connection with these heavy 
repairs will be substantial. In such cases the charge to retire- 
ments, while not technically classified as an expenditure for labor 
and material used in repairs, does represent in effect the expendi- 
ture of a like amount of labor and material for that purpose which 
is classified as additions and betterments work and added to the 
investment account. This relation between charges to deprecia- 
tion, retirements and investment should be borne in mind when 
comparisons are made between the physical work performed and 
the maintenance expenses in two periods. 

Causes of Fluctuations in Labor and Material Expense* — 
By far the largest items of expense included in the repair accounts 
are labor and material, and the principal part of an analysis con- 
sists in the determination of the causes for fluctuations in these 
items. 

Fluctuations in labor and material are due to two general causes : 

1. Changes in rates of pay of labor and prices of material. 

2. Changes in the number of hours worked and quantities of 

material applied. 

The first of these general causes represents factors which are 
usually already established and beyond the control of the men in 
direct charge of the work and for which they therefore cannot be 
held responsible. 

The second represents factors under their control and reflects the 
efficiency with which the work is performed. It is therefore im- 
portant that the division between these two causes should be clearly 
established. 



Maintenance of Way and Structures Expenses 67 

Methods o£ Dividing Fluctuations Between These Two 
General Causes. — ^The method by which the increase or decrease 
in the cost of maintaining any particular kind of fixed property 
is divided between these causes is illustrated in the following 
example, in which one class of labor and one kind of material is 
assumed for the sake of simplicity: 



Current 

Previous 

Increase 


Period 

Period 

or Decrease 

Cost of labor 

$800 

$480 

$320 

Rate per hour 

$.80 

$.60 

$.20 

Man hours of labor 

1000 

800 

200 

Cost of material 

$432 

$180 

$252 

Price per pound 

$lo 

$.30 

$^ 

Pounds of material used. . • . 

720 

600 

120 


The problem is to determine how much of the increase in labor 
of $320 is due to the increase of $20 in the rate per hour; and 
how much to the increase of 200 man hours of labor ; also how 
much of the increase in the cost of material of $252 is due to 
the increase of $.30 in the price per pound, and how much to the 
increase of 120 pounds in the material used. 

Taking labor first, if there had been no change in the hours 
worked, that is, if 800 hours had been worked in eadi period, and 
only the rate had increased, the cost in the current period would 
have been 800 hours X $-80 or $640 as compared with $480 in 
the previous period or an increase of $160 due exclusively to the 
increase of $20 in the rate of pay per hour. 

On the other hand, if there had b^ no change in , the rates 
of pay but an increase of 200 hours in the hours worked, the cost 
in the current period would have been 1000 hours X $-60 or $600 
as compared with $480 in the previous period or an increase of 
$120 due exclusively to the increase in the hours worked. The 
sum of these two increases, namely $160 and $120, is $280, leaving 
$40 out of the total increase of $320 still to be explained. This 
increase of $40 is due to the combination of the increase in rate 
and increase in hours, namely, 200 hours X $-20 or $40, which 
is not due exclusively to either cause but to a combination of the 
two. 

Theoretically the iiKrease of $40 should be divided equally 
betwe^ the turo causes or on sonw other arbitrary t^s. As a 



68 Analysis of Railroad Operations 

matter of fact this refinement is not usually practiced and it is 
customary to assign the portion of the increase or decrease due 
to the combined causes entirely to one cause or the other in 
accordance with the preference of the statistician making up the 
formula. For the reasons stated hereafter it is the author's 
preference to include this part of the fluctuation with that due to 
changes in hours worked. 

The division of the increase in the cost of material between 
prices and quantities used is worked out in the same manner as 
that just indicated for the cost of labor. 

Use of Equation Factors. — In the foregoing example it was 
assumed for the sake of simplicity that there was only one class 
of labor and material in the account to be analyzed. As a matter 
of fact there are usually several classes of both labor and material 
included in each account. It is necessary therefore to work out 
each class of labor and material separately, in accordance with the 
method outlined above. When several different classes of labor 
and material are involved this may prove to be a long and expensive 
process and can be simplified by the use of equation factors. 

An equation factor is a ratio which is based on the average 
percentage of increase in rates of pay or prices of material of 
the current period as compared with the previous period. When 
the cost of labor of the previous period is multiplied by the labor 
equation factor the result represents the approximate cost of the 
hours of labor of the previous period at the rates of pay of the 
current period. The same process is followed for material. 

Method of Developing Equation Factors. — This average per- 
centage of increase or decrease in rates of pay or prices of ma- 
terial is based on the principal items entering into the cost of 
labor and material, so that the factor developed will be applicable 
to all the items. 

The equation factors are expressed in the following manner. 
If there was an average increase of 20 per cent in the rates of . 
pay, the equation factor for labor would be 1.00 -f .20 or 1.20. 
If there was a decrease of 20 per cent the equation factor would 
be 1.00 .20 or .80. 

The method of determining the amount of the increase or de- 
; crease due to changes in rates of pay or prices of material through 



Maintenance of Way and Structures Expenses 69 

the use of equation factors is shown below, the cost of labor and 
material and the average rates of pay and prices of material given 
in the table on page 166 being used. 


Labor equation factor 

Percentage of Increase in Rates 
Increase in rate per hour ($.20) 


= 33 1/3 per cent, which 


^ Rate per hour of previous period ($.60) ' 
is the percentage of increase in rates 
Labor equation factor = 1,00 + .33 1/3 or 1.33 1/3 


Material equation factor 


Percentage of Increase in Prices 


Increase in price per pound ($.30) 
Price per pound in previous period ($.30) 
the percentage of increase in prices 


100 per cent, which is 


Material equation factor = 1.00 + 1.00 or 2.00 
Application of Equation Factors. — 


Labor Material 

1. Expenditures, current period $800 $432 

2. Expenditures, previous period 480 180 


3. Increase $320 $252 

4. Equation factor ... 1.33?4 2.00 

5. Equated cost of previous petwd (Item 

2XItem 4) $640 $360 

6. Increase due to changes in rates of pay 

and prices of material (Item 5 — 

Item 2) $160 $180 

7. Balance of increase due to changes in 

hours worked and quantities of ma- 
terial applied (Item 3 — Item 6),., $160 $ 72 


8. Total of Items 6 and 7 $320 $2S2 


By comparing the analysis of the increase in the cost of labor 
as developed by the equation factor method with the more de- 
taUed analysis shown on page 66 it will be noted that under the 
equation factor method the increase due to changes in rates of 
pay corresponds to that developed by the detailed method as due 
exclusively to the increase in rates of pay and do^ not include 



70 Analysis of Railroad Operations 

any portion of the increase of $40 due to the combination of the 
increase in rates of pay and hours worked. Under the equation 
factor method the entire amount of the increase due to the com- 
bined cause is attributed to the increase in hours worked. 

Formula for Analyzing Increases or Decreases in Labor 
and Material Expense. — In order to secure uniform results 
under either method it is therefore recommended that the following 
formula be used for analyzing increases or decreases in labor and 
material expense when the detailed method given on page 66 is 
used. 

1. The increase or decrease due to changes in rates of pay or 
prices of material is obtained by multiplying the increase or de- 
crease in the rate i«r hour or price of material by the hours of 
labor or the quantities of material of the previous period. 

2. The increase or decrease due to changes in the hours worked 
or quantities of material used is obtained by multiplying the in- 
crease or decrease in hours worked or quantities of material used 
by the rate per hour or price of material of the current period. 

This formula applied to the labor items on the table on page 67 
works out as follows : 

Increase or Decresise Due to Changes in Rates of Pay 


1. Man hours of labor previous, period 800 

2. Increase in rate per hour $ .20 

3. Increase due to increase in rate per hour 

(Item 1 X Item 2) $160.00 

Increase or Decrease Due to Changes in Hours Worked 
4-. Rate per hour current period. $ .80 

5. Increase in man hours 200 

6. Increase due to increase in man hours worked 

(Item 4 X Item S) $160.00 

7; Total Increase in Cost of Labor 

(Item 3 + Item 6) $320.00 


Comparison of Fluctuation in Hours Worked and Amount 
pf Repair Work Performed*^ — ^Having determined how much 
of the total incr^se in labor and material is beyond the control, 
Pf the men in charge of the wqrk and how much th^ should be . 
. held responsible for, the riext ' step is to determine whether ^e 



Maintenance of Way and Structures Expenses 71 

increase or decrease in the hours worked represents a correspond- 
ing change in the amount of repair work actually performed. 

This is the hardest part of the problem, because it is almost 
impossible to devise a statistical unit that will accurately represent 
the quantity of repair work actually performed in each period 
on any particular kind of fixed property, the cost of which is 
included in the appropriate account or group of accounts. This 
is particularly true in the case of repairs to bridges, buildings and 
other structures. Consequently, the results obtained from the 
man hours expended by the bridge and building gangs in two 
periods has to be determined chiefly by personal observation aided 
by a comparison of the quantities of the more important materials 
applied and the value of all material applied after allowance for 
changes in prices. An analysis of the larger repair jobs performed 
in each period should also be made. 

The man hours expended by the section gangs or track forces 
are distributed principally to three accounts, viz. : 

202, “Roadway maintenance” 

220, “Track laying and surfacing” 

272, “Removing snow, ice and sand” 

In the case of Account 220, “Track laying and surfacing,” the 
quantities of ties, rail, ballast and other track material applied 
are the controlling factors in the expense and when the man hours 
of track labor, as included in Account 220, “Trade laying and 
surfacing,” are distributed between the application of the different 
kinds of track material and the work of aligning, surfacing, gaging 
and shimming tracks and other track work which does not involve 
the application of material, the results obtained from the man 
hours expended in track maintenance in each period, can be de- 
termined with reasonable accuracy. 

Unfortunately, the accounting rules of the Commission do not 
require this distribution and, consequently, it is not made by most 
railroads. In the absence of this distribution, the results obtained 
from the man hours of track labor expended in each period can 
only be determined in a general way by a comparison of the quan- 
tities of ties, rail, ballast and other track material applied* 

In the case of the other two aa:outtts in which the cost of section 



72 Analysis of Railroad Operations 

labor is included, namely 202, '"Roadway maintenance,^^ and 272, 
""Removing snow, ice and sand,^’ no application of material is 
involved and there is no other index of the quantity of work 
performed with which the man hours of labor can be compared. 

Comparisons of the total man hours of track labor with the 
quantity of work performed in each period are not very satisfac- 
tory on most roads, owing to the failure to distribute Account 220, 
""Track laying and surfacing,’^ between the various materials ap- 
plied and the lack of statistical data covering the quantity of work 
performed as represented by the man hours included in Accounts 
202, "Roadway maintenance,^^ and 272, ""Removing snow, ice and 
sand." In view of these conditions the most effective way to 
analyze these accounts is to analyze the man hours of section labor 
by divisions and districts and make a special study of the con- 
ditions on those districts where the principal fluctuations occur. 

In this connection, the importance of the man hours as the basis 
of these analyses is apparent and happily this information is readily 
available from the payroll records of practically all railroads. The 
Interstate Commerce Commission requires each road to make a 
voluminous report of the hours worked and compensation of the 
various classes of employees, which is referred to on page 369 of 
the Appendix, While the hours worked are distributed by classes 
of employees and not by accounts, this information can be obtained 
from the payrolls. 

The cost of labor amounted to 57 per cent of total operating 
expense for Class 1 railroads in 1923, so the importance of a care- 
ful analysis of the results obtained from this expenditure can 
hardly be overestimated. 



CHAPTER IX 


UNIT COSTS OF MAINTAINING FIXED 
PROPERTY 

In the preceding chapter an outline was given of the course 
usually followed in analyzing the causes of fluctuations in the 
expenses of maintaining the fixed property of a railroad, the 
principal steps being as follows : 

1. The arrangement of the primary accounts under the general 
account, Maintenance of Way and Structures for the current and 
previous periods into groups according to the character and cause 
of the expense with a summary of the total expenses of each 
group, and the location of the accounts, in which the principal 
fluctuations occur. 

2. A division of the increases or decreases in the labor and 
material items included in the repair accounts as between those 
due to changes in the rates of pay and prices of material and 
those due to changes in the hours worked or quantities of material 
applied. 

3. A comparison of the increases or decreases in thes hours 
worked with the fluctuation in the quantities and value of ma- 
terial applied and other units indicating the amount of repair work 
performed. 

Supplementing this analysis of the causes of fluctuations in the 
expenses of the current period as compared with those of the 
previous period it is customary to develop unit costs for the more 
important classes of repair work and for the total Maintenance 
of Way and Structures expenses. 

Basis of Unit Costs. — Unit costs may be divided into two 
general groups based on 

U) Units of service performed and 

(2) Units r^ecting the activities of the various d^iarttnents. 

' ■ 73 ' 



74 Analysis of Railroad Operations 

The unit costs of service performed such as the cost per ton 
mile and per passenger mile are useful in connection with rate 
studies, .etc., but are not of particular value in analyzing the causes 
of fluctuations in expenses. For this purpose the second group 
of unit costs are used as they are based on units which measure 
the performance of the various departments. These units reflect- 
ing the activities of the maintenance of way department may be 
further subdivided into those which indicate the requirements for 
maintenance and those which indicate the actual repair work 
performed. 

Units Reflecting the Activities of the Maintenance of Way 
Department. — ^The requirements for maintenance are indicated 
by the units of property maintained adjusted for changes in the 
use thereof as hereafter explained. The cost per unit of property 
maintained can be developed for each individual account or group 
of accounts and for total Maintenance of Way and Structures, 
as hereafter described. 

Units indicating the amount of repair work performed are not 
so readily available, particularly for bridges, buildings and other 
structures, as explained in the previous chapter. As a general 
proposition the quantities of material applied measure the amount 
of repair work performed. It is not practicable, however, to add 
tt^tW the quantities of different kinds of material entering into 
any particular account, and the value of the nraterial applied after 
allowance for changes in prices does not reflect the difference in 
the number of man hours required for applying $1.00 worth of 
the different kinds of material. Therefore, it usually is necessary 
to develop separate unit costs of appljdng the various kinds of 
material entering into the work in question. Of course this can 
only be done when the distribution of the labor cost to these 
various classes of repair work is available. 

For example, the cost of applying ties, rail and ballast should 
each be developed separately and it is not practicable to develop 
a consolidated unit cost of work performed applicable to the three 
elements of track maintenance. On the other hand, the unit cost ! 
of requirements of trade maintenance based on the miles of track 
maintained can be developed for each item individually and for 
the total cost of track maintenance. 



Unit Costs of Maintaining Fixed Property 

Significance of Fluctuations in Unit Costs Based on I 
quirements for Repairs and Actual Work Performed. 
Increases or decreases in the units of work performed as indical 
by the quantities of material applied will normally produce cor 
spending increases or decreases in the. cost of the labor a 
material used in these repairs. Consequently, unit costs of wc 
performed, obtained by dividing these expenditures by the ur 
of work, should normally remain constant irrespective of flucti 
tions in the units of work and the expenditures for labor a 
material. Fluctuations in the cost per unit of work perform- 
therefore, are signals that there has been a change in conditic 
such as rates of pay, prices of material or productivity of labor 

On the other hand, fluctuations in the units maintained do t 
necessarily produce corresponding changes in the repair wc 
actually performed, or taken from another angle, there frequen 
will be substantial fluctuations in expenditures for repairs with 
change in the units of property maintained; these fluctuations 
expenditures being occasioned by changes in the policy of 1 
management rather than in the requirements for repairs. 

Fluctuations in the cost per unit of property maintained, the 
fore, are signals that changes have occurred in the relative amoi 
of money expended for maintenance but not necessarily in i 
unit cost of doing the work. 

The relation between the cost per unit of property maintair 
and the cost per unit of work performed is shown by the folio 
ing example giving the cost of tie renewals based on the mi 
of track maintained and on the number of ties renewed : 


1. Cost of tie renewals (Labor 

and material) 

Units of Requirements: 

2. Miles of track maintained.... 

Units of Work Performed: 

3. Number of ties renewed 

Unit Cost of Tie Renewals: 

4. Per mile of track maintained 

(Item 1 Item 2) 

5. Per tie. renewed (Item 1 ^ 
Item 3) 


Current 

Period 

Previous 

Period 

Increase 
or Decrease 

$72,000 

$45,000 

$27,000 

120 

100 

20 

48.000 

30,000 

18,000 

$ 600 

$ 450 

i ISO 

$ 1,50 

$ 1.50 




76 Analysis of Railroad Operations 

In this example the cost of tie renewals per mile of track 
maintained (Item 4). increased from $450 to $600, which was a 
signal to the analyst that relatively more money was being spent 
per unit of requirements in the current period than in the previous 
period. His first concern is whether this is due to an increase 
in the unit cost of doing the work; that is, in the average cost of 
applying each tie. He is reassured in this respect by finding 
that there has been no increase in the average cost per tie renewed 
(Item 5). In other words, the increase in the cost of tie renewals 
per mile of track maintained is due entirely to the increase in 
the average number of ties renewed on each mile of track main- 
tained. 

This indicates a change in standards. It may mean that tie re- 
newals were deferred in the previous period on account of financial 
conditions, and that this deferred maintenance is being added 
to the normal maintenance in the current period. If the periods 
under comparison are periods of less than a year this difference 
in standards may be due to seasonal conditions, viz., ties are not 
always renewed in the same months of the year. 

This example brings out the importance of comparing the unit 
costs of the current period, both those based on units of property 
maintained and those based on units of work performed — with 
normal or standard unit costs as well as with the unit costs of 
the previous period. In fact the principal reason for developing 
unit costs is for the purpose of making this comparison with 
standard unit costs in order that the results obtained by each 
department may be compared with a standard performance as well 
as with the performance of a previous period which may be sub- 
stantially below this standard. 

These standard unit costs are similar to the bogey established 
for each hole on a golf course and give the supervising officers a 
mark to shoot at which is more stimulating than a comparison 
with the performance of the previous period which may or may 
not have been up to standard. 

With this distinction in mind between unit costs based on units 
of requirements and those based on units of work performed, 
let us now examine the methods usually followed in developing 
'each group of unit costs. 



<$ 


Uflit Costs of Maintaining Fixed Property 77 

The Development of Unit Costs of Property Maintained. 
— The most appropriate unit of requirements on which to base the 
imit costs of track maintenance is the mile of track maintained 
after equation for differences in the maintenance requirements 
of first main track, additional main track and yard tracks and 
sidings, and in the use made of the property as hereafter de- 
scribed. This unit was used by the United States Railroad 
Administration as an index of maintenance requirements for 
track and also for all other classes of fixed property in studies 
of the maintenance expenditures made by the railroads during 
the so-called Test Period (3 years ending June 30, 1917) and 
the period of Federal Control (26 months ended Feb^ry 29, 
1920). The assumption was that each mile of equated track 
carried with it on the average similar requirements for main- 
taining bridges, buildings and other structures. 

Other units of requiremOTts, however, are sometimes used, such 
as the miles of road or miles of main track, the distinction between 
these three units beit^ as follows : 

Distinction Between Miles of Road, Miles of Main Track, 
and Miles of All Tracks.— Miles of road are based on the dis- 
tances between terminals, irrespective of the number of tracks, 
and are sometimes called miles of first main track. Miles of main 
track consist of the miles of first main track plus the i^es of 
second, third, fourth, etc. j main track called additidnai,m?iini track. 
Miles of hack consist of the total miles of all tracks, Hrst main, 
additional main and yard trades and sidings. 

For example, the A and B Railroad runs from A to B, a dis- 
tance of 100 miles. The railroad is double tracked half of the 
distance and there are 20 miles of passing tracks, house tracks 
and other station tracks at intermediate stations. At A, there 
are 10 miles of tracks in the terminal yard and around the stations 
and at B, 8 miles of these yard tracks and sidings. Ihe track 
mileage of the A and B Railroad wotdd be classified as follows; 


" Miles of road (or first main track) 100 milw 

: Additional inam track 50 " 

.Toial main track 150 ; 

■ Yard trades and sidings " 

. , 1 ?o*ai;^ tra<k3}JjCn)lles'^q^^^ 18S : “ 



7$ Analysis of Railroad Operations 

It is apparent that the miles of all tracks after proper equation 
of the miles of first main track, additional main track, yard tracks 
and sidings as hereafter described is the most inclusive of these 
three units and therefore more nearly reflects the total require- 
ments for track maintenance and also the maintenance require- 
ments of other classes of fixed property. 

Distinction Between Miles of Track Operated and Main- 
tained. — In this connection, the difference between track operated 
and track maintained should be made clear. The miles of track 
operated include both the miles of track owned or leased by a 
railroad and maintained by its forces, and the miles of track 
owned and maintained by other railroads over which it operates 
its trains. The miles of track maintained include only the miles 
which it maintains with its own forces and usually corresponds to 
the miles owned or leased. 

Referring again to the example of the A and B Railroad given 
above, let us assume further that this railroad enters the city of 
A by operating its trains over the double tracked line of the A 
and C Railroad for a distance of five miles and that there are 
three miles of yard tracks and sidings connected with this stretch 
of track. This five miles of road and the additional main track 
and yard tracks and sidings appertaining thereto are owned and 
maintained by the forces of the A and C Railroad, but all of the 
other tracks over which the A and B Railroad operates, including 
its yard and terminals at A, are owned by it and maintained by 
its own forces. Furthermore, the B and C Railroad enters B 
by running over five miles of the tracks of the A and B Railroad 
in the same manner in which the A and B Railroad enters A 
over the tracks of the A and C Railroad. 

The miles of track operated and the miles of track owned and 
maintained by the A and B Railroad would be classified as follows : 

A AND B Railroad 
Miles Miles Owned 
Operated and Maintained 


Miles of road (First main track) .... 100 95 

Additional main track SO 45 

Total main track ISO 140 

Yard tracks and sidings 38 35 

Total all tracks (Miles of trade) . . 188 175 



Umt Costs of Maintaining Fixed Property 79 

In the discussion of the maintenance of way accounts in the 
previous chapter it was pointed out that the total cost of main- 
taining the fixed property of a railroad, when the work is per- 
formed by the forces of that railroad, is included in the primary 
accounts (excluding the joint facility accounts) ; that the joint 
facility debit account includes the amounts paid by it to other 
railroads for its share of the cost of maintainii^ joint fa- 
cilities maintained by them; and the joint facility credit account 
includes the amounts received by it from other railroads for 
their share of the cost of maintaining joint facilities maintained 
by it. 

Referring again to the example given above, the cost of main- 
taining the 175 miles of track and facilities appertaining thereto 
owned and maintained by the A and B Railroad is included in 
the primary accounts of the A and B Railroad (excluding the 
joint facility accounts) ; the amounts paid to the A and C Railroad 
for the use of the 5 miles of road entering A are included in the 
joint facility debit accotmt; the amounts received from the B 
and C Railroad for its use of the tracks entering B are included 
in the joint facility credit account. 

The Tinit cost per mile of track maintained for total maintenance 
of way and structures therefore should ecclude the joint facility 
accounts. The unit cost per mile of trade operated should include 
the joint facility accottnts. 

Miles of Equated Track Maintained.— In developing unit 
costs per mile of track maintained, it is customary to give eflfect 
to the different requirements for maintaining a mile of first main 
track, addition^ main track and yard tracks and siding, together 
with the bridges, buildings emd other structures appertaining 
thereto, by applying correction factors to the track miles. The 
following factors were used by the United States Railroad Admin- 
istration in its maintenanre studies : 

Miles of first main track were multiplied by 1.0 

Miles of additional main track were “ “ .8 

Miles of yard tracks and sidings “ “ '■ .5 ’ 

The application of these factors is shown in tfc 
'exampfet r 



8o Analysis of Railroad Operations 



Current 

Previous 

Increase 


Period 

Period 

Amount 

Per Cent 

Actual Track Miles: 

First main track 

1,000 

900 

100 

11 

Additional main track 

200 

100 

100 

100 

Yard tracks and sidings . . . 

600 

400 

200 

so 

Total 

1,800 

1,400 

400 

29 

Equated Track Miles: 

First main track 

1,000 

900 

100 

11 

Additional main track 

160 

80 

80 

100 

Yard tracks and sidings . . . 

300 

200 

100 

50 


1,460 

1,180 

280 

24 


Under this formula as worked out in the foregoing example 
the requirements for repairs (assuming the same use in each 
period) are estimated to increase in the same proportion as the 
equated track miles (or 24 per cent) instead of in proportion to 
the actual track miles (or 29 per cent). 

Effect of Use of Property on Repairs. — In comparing the 
requirements for the maintenance of fixed property in two periods 
based on the miles of equated track maintained, it is customary 
to give consideration to the relative use made of the property 
as expressed in the weight of locomotives and cars moved over it 
in each period. 

It is evident that the cost of maintaining certain classes of 
fixed property, such as the track and bridges, would be more 
affected by use as reflected in the movement of trains over the 
railroad than the cost of maintaining other fixed property, such as 
stations, shops and other buildings. A study was made by the 
Railroad Administration of the relative effect of train movement 
on each class of expense, as a result of which it was estimated that 
approximately one-third of the expenses would vary directly with 
the use. In other words, if there was an increase in use of 15 
per cent, the requirements for repairs would be increased approxi- 
mately 5 per cent. 

In working up the factors of use the relative effect of locomo- 
tives and cars and the higher speed of passenger trains on main- 
tenance costs were expressed by the following correction factors 
applied to the gross ton miles. (The gross ton miles are obtained 
by multiplying the weight of locomotives, cars and contents by. 



TJmt Costs of Maintaining Fixed Property 8l 

the distance moved in the same manner as the revenue ton miles 
are computed, as explained on page 24. The sources from which 
these statistics are obtained are explained in Chapter XIV.) 

Gross ton miles of Passenger locomotives were multiplied by 3 

“ “ " “ Freight “ “ “ “ 2 

“ “ “ “ Cars and contents " “ “1 

In estimating the effect of the use on the cost of maintenance 

the train movements of other railroads over joint tracks main- 
tained by the railroad in question should not be overlooked. 

The reader is again reminded that fluctuations in the cost per 
mile of equated track maintained after allowance for differenpe 
in use do not necessarily indicate similar fluctuations in the direct 
unit cost of doing the work but merely represent the difference 
in the actual expenditures per unit of maintenance requirements 
in the two periods. Whether the work was actually performed 
with greater or less efficiency and at a high or lower unit cost can 
be determined only through the development of unit costs based 
on units of work actually performed. 

The Development of Unit Costs Based on Work Actually 
Performed. — ^The development of imit costs based on the units 
of work performed depends: first, on the availability of units 
which will in themselves represent the actual expenditure of labor 
and material, and second, on the distribution of the cost of this 
labor and material to the units in question; In the comparison of 
the man hours with the quantify of work performed it was pointed 
out that the quantity of material applied was the best indication 
of the quantity of work performed. While the quantities of the 
major materids applied are readily available for each account, 
it is not practicable to add together die different unite of material 
such as the number of ties, tons of rail, yards of ballast, etc.,: 
and nteke up a composite unit of work performed for a repair 
account or group of accounts. On the other hand, the cost of 
labor included in any particular primary account is not usually 
(fistributed to the various classes of material aiplied. 

As a result of this situation, the unit costs of, work performed 
. in toihtainmg fixed janperty are not devdpped currently by ihost 
i^pads. it may.ndf be practicable to devdop these unit 



82 Analysis of Railroad Operations 

costs of work performed for bridges, buildings and other struc 
tures, there does not appear to be any good reason for the failur< 
to do so with respect to track maintenance. It would seem t( 
be of particular importance to check the results obtained by trad 
labor from every possible angle on account of the fact that it ii 
largely unskilled and on many roads is constantly changing. 

For this purpose unit costs of tie, rail, and ballast renewal 
would be particularly effective. 



CHAPTER X 


ANALYSIS OF FLUCTUATIONS IN MAINTE- 
NANCE OF EQUIPMENT EXPENSES 

The analysis of the causes of fluctuations in maintenance of 
equipment expenses follows a course similar to that outlined for 
the analysis of fluctuations in maintenance of way and structures 
expenses, namdy — 

1. The grouping of the primary accounts for each period in 
accordance with the cause and character of the expense, 
with a summary of the total expenses of each group, and the 
location of the accounts in which the principal fluctuations 
occur. 

2. The division of the increases or decreases in the labor and 
material items of the repair accounts as between amounts 
due to changes in rates of pay and prices of material and to 
changes in hours worked and quantities of material applied. 

3. The comparison of fluctuations in hours worked with fluctua- 
tions in the amount of repair work performed. 

4. Development of unit costs. 

Grouping of Primary Expense Accounts. — ^The first step, 
namely, the rearrangement of the primary accounts, by groups in 
accordance with the cause and character of the expense is givra 
on page 165 of the Appendix. As in the case of Maintenance of 
Way and Structures the amounts shown opposite each amount are 
the same as in the table on page 156 of the Appendix. 

A sunmuu 7 of this statement is given bebw and pre^ts in 
condensed fom the principl. items of maintenance of equilunent 
.expojse. 



84 


Analysis of Railroad Operations 

Class I Roads in 1925 


Equipment Repairs: 

Amount 

Per Cent 
of Total 

Locomotives 

$ 562,145,760 

38.37 

Freight train cars 

475,433,689 

32.45 

Passenger train cars 

91,550.882 

6.25 

Other equipment 

38,459.705 

2.62 

Total equipment repairs 

$1,167,590,036 

79.69 

Equipment depreciation 

156,879,060 

10.71 

Equipment retirements 

38,821,132 

2.65 

Shop and power plant machinery — 
repairs 

33,958,361 

2.32 

Shop and power plant machinery — 
depreciation 

1,002,116 

.07 

Supervision and miscellaneous 

63;501,495 

4.33 

Joint facilities 

3,404,395 

.23 

Total maintenance of equipment. , . 

$1,465,156,595 

100.00 


As in the case of maintenance of fixed property, the repair 
accounts constitute by far the larger part of maintenance of equip- 
ment expenses and will receive our principal attention. Before 
taking up the analysis of these accounts, however, let us discuss 
briefly the character of the items contained in the other groups. 

Depreciation and Retirements. — It will be noted that the 
charges to the depreciation accounts are much larger than in the 
case of maintenance of way and structures. This is due to the 
fact previously mentioned that the current accrual of depreciation 
on equipment is required by the Interstate Commerce Commission, 
whereas the current accrual of depreciation on fixed property is 
left optional with the railroads. The amounts charged to deprecia- 
tion on equipment, as in the case of depreciation on fixed property, 
depend upon the rates of depreciation and the values to which they 
are applied. Fluctuations in these accounts, therefore, depend 
upon these two factors. 

It will also be noted that separate accounts are provided for 
retirements, whereas these charges are included in the repair 
accounts of Maintenance of Way and Structures. Furthermore, in 
the case of the retirement of fixed property the charge is only 
made to maintenance expenses when the unit of property is re- 
placed with another unit of like purpose. When the unit is not 
replaced, the retirement charge is rhade to the ptbfit and loss 
accounts. 



Maintenance of Equipment Expenses 85 

No distinction is made in the case of equipment retired between 
units retired and replaced and units retired and not replaced, 
the retirement charges in either case being made to maintenance 
of equipment, except that the amount of depreciation prior to 
July 1, 1907 (if the unit was acquired prior to that date), not 
previously written off or provided for, is charged to profit and loss. 

The amounts charged to maintenance expenses for retirements 
depend upon the number of units retired, the book value thereof, 
the amount of depreciation already accrued on these units and 
the salvage or scrap value. If a railroad has been using an 
adequate rate in accruing its depreciation, the charges to “re- 
tirements” will be small and there may even be a credit to “retire- 
ments” if this salvage or scrap value is higher than originally 
estimated when the rate of depreciation was established. On the 
other hand, if a railroad has merely used a nominal rate to comply 
with the rules of the Interstate Commerce Commission, the de- 
preciation accrued will not begin to cover the loss in the value 
of the assets when the unit is retired and there will be a corre- 
spondingly large charge to “retirements.” 

The practical working out of the accounting for depredation 
and retirements is set forth in the following example: 

Let us assume a freight car costing $1,000 in 1915, with an 
expected life of 20 years and an estimated net salvage value of 
$200. Under the accounting rules of the Interstate Commerce 
Commission, the depredation problem in 1915 was to deteftnine 
the percentage which applied to the original cost would set up 
uniform annual accruals which in 20 years would equal $SX). 

Original cost ($1,000) less salvage ($200) equals depredation 
reserve ($800) at 20 years. 

$800 divided by 20 equals $40, the annual depreciation accrual. 

^ is 4 per cent of $1,000; hence the depredation rate in this 
case would be 4 per cent. 

Three ^ical cases of accounting that might be necessary in 
connection with the retirement of such a unit are as follows : ' 

1. Assume that in 1935, after 20 years’ service, the car is woin 
out and is retired ^ith the antidpated salvage value of ^00/ 
No charge to “retirements” would be required, tecause the salvage 
of '^206 add^ to the depredation reserve of $8(X) eqaal^^ ’$l,0iX), 



86 Analysis of Railroad Operations 

the ledger value of the car, and there is no loss in assets when 
the car is written out of the investment account. 

2. On the other hand, assume that the car did not live out its 
expected life, but was retired in 1930, after 15 years of service, 
with the same salvage value as in case 1. There would be a charge 
to "‘retirements'’ of $200 to equalize the under accrual of deprecia- 
tion, as the depreciation reserve after IS years would only amount 
to $600 instead of $800 as in case 1. 

3. Another situation frequently arises whereby the salvage at 
the date of retirement is greater than had been anticipated, say 
$300 instead of $200 for this particular car. If the car was retired 
under these conditions after 20 years’ service, there would be a 
credit of $100 to “retirements.” 

These three cases are summarized in the following table : 

Case 1 Case 2 Case 3 

1. Original cost (ledger value) $1,000 $1,000 $1,000 

2. Depreciation reserve at date of re- 

tirement $ 800 $ 600 $ 800 

3. Net salvage value 200 200 300 

4. Total depreciation and salvage ...... $1,000 $ 800 $1,100 

5. Required charge or credit to “retire- 

ments” (Item 1 minus Item 4) — Dr. 200 Cr. 100 

Shop and Power Plant Machinery — Repairs and Deprecia- 
tion. — These accounts include the cost of repairs and charges to 
depreciation for shop machinery and tools at the repair shops, 
power plants and sub-stations. Representing maintenance of fixed 
property as distinguished from rolling stock or floating equipment, 
these accounts seem out of place among the accounts relating to 
maintenance of equipment and should properly be included in 
maintenance of way and structures. In fact, in the accounting 
analyses of the maintenance accounts of the carriers made by the 
United States Railroad Administration, this group of accounts 
was included with the maintenance of way accounts instead of 
with the maintenance of equipment accounts. The entire group 
constituted but 2.4 per cent of the total maintenance of equipment 
expense of Class I roads in 1923 and is relatively unimportant. 

Charges for retirements in connection with shop and power 
plant machinery retired and replaced are included in the repair 



Maintenance of Equipment Expenses 87 

accounts, the accounting being similar to that for retirements of 
other fixed property, of which the cost of maintenance is included 
under Maintenance of Way and Structures. 

Supervision and Miscellaneous. — In this group will be found 
the cost of supervision of the forces engaged in maintenance of 
equipment, and miscellaneous expenses, such as injuries to persons 
(chiefly employees hurt in shops), insurance, stationery and 
printing, other expenses and equalization. Other Expenses is 
usually a small item but assumed large proportions in 1922 on 
account of the shop strike. Special police protection, guards and 
other unusual expenses due to the strike were charged to this 
account which amounted to $53,591,348 for Class I roads in 1922 
as compared with $625,096 in 1921, and $5,132,664 in 1923. 

Equalization expenses as reported in 1923 represented the net 
difference between monthly accruals based on annual budgets and 
actual expenditures. The purpose of this account has been modi- 
fied, as explained in detail under Maintenance of Way and 
Structures, page 62. 

Joint Facility Accounts. — ^These accounts represent the ex- 
pense of maintaining joint equipment at terminals. In the case 
of an individual carrier, the credit account represents the amount 
billed by it against other carriers covering their share of the cost 
of maintaining engines, cars or other equipment used in joint 
service at terminals, the total cost of which was included in the 
primary accounts of the carrier. The debit account represents 
amounts billed against the carrier for its share of the cost of 
repairs to joint equipment at terminals, the total cost of which 
was included in the primary account of other carriers.* 

Equipment Repairs. — Turning now to the second step in the 
analysis, namely, the determination of the causes of fluctuations in 
the labor and material costs of equipment repairs, it is first neces- 
sary to secure a division of the total amount included in the various 
accounts as between the various elements of expense, namely: 

Labor 

Material and supplies 

Miscellaneous expense 

* Accounts 336 and 337 amended Aug. 1, 1925, to include equipment in 
joint train service. . 



88 Analysis of Railroad Operations 

This information is not published by the railroads but is readily 
available from the records of the accounting department. 

As in the case of maintenance of way and structures, labor 
includes the amounts paid to the forces of the railroad for the 
time they are engaged in the work of repairing equipment. 
Material and supplies include the cost of the material and sup- 
plies used by these forces in the repair work. This cost includes 
the freight charges on foreign lines, the cost of inspection and 
a proportion of die store expense. 

. Under miscellaneous expense are included two important items 
which are not found in maintenance of way miscellaneous expense 
and which need explanation. 

Shop Expense. — One of these items is shop expense, which 
includes the general expense of operating repair shops and facili- 
ties, which cannot be directly assigned to any specific repair 
account. Shop expense includes such items as the cost of the 
power, light and heat generated at the shop power plant, wages 
of department foremen, other supervising foremen, and their 
clerks, sweepers and clean-up men around the shops, watch- 
men, gatekeepers, etc., expenses of operating switching locomo- 
tives assigned exclusively to shop switching, general shop supplies, 
etc. 

The total shop expense is distributed to each account on the 
basis of the direct labor in each account. While shop expense 
could be split up as between labor, material and miscellaneous, 
and these items could in turn be distributed to the labor, material 
and miscellaneous items respectively, of each repair account, 
analysis of the repair accounts is simplified by keeping shop ex- 
pense as one item in the miscellaneous column and studying it in 
connection with the total shop expense as distributed to all 
accounts. A detailed list of the items included in shop expense 
will be found in the classification on page 196 of the Appendix. 
The distribution of shop expense between the different items of 
expense such as power, heating, lighting, general shop employees, 
etc., and between labor, material and miscellaneous expense, can 
be obtained from the accounting or mechanical departments. 

Freight Car Repair Bills. — ^The other principal item of mis- 
cellaneous expense consists of the net difference between bills 


Maintenance of Equipment Expenses 89 

from others for repairs made to home equipment at outside shops 
or by other railroads, and bills against others for repairs made to 
foreign equipment. These amounts are not ordinarily large except 
in the case of freight train car repairs. The freight cars of the 
country are virtually pooled and a car may spend many months 
away from its owner. Under these circumstances when repairs 
become necessary they are made by the road using the car. Re- 
pairs due to ordinary wear and tear are called ‘‘owner’s defects,” 
and the cost thereof is billed against the owner. The amount of 
these bills is credited to Account 314, “Freight train cars — repairs,” 
by the road making the repairs, as an offset to the cost of labor and 
material expended on repairs to these freight cars which are in- 
cluded in this account. The owner of the car, on the other hand, 
includes the bills in his Account 314 together with the cost of 
repairs to his freight train cars made by his own forces. 

There are, however, so many complications confronting the 
analyst in his study of Account 314, “Freight train cats — ^repairs,” 
that this account will be made the subject of a separate chapter. 

Methods of Analyzing Fluctuations in Labor and Material 
Expense. — ^The methods of analyzing the fluctuations in the labor 
and material items in the equipment repair accounts are similar 
to those used for the labor and material items in the repair accounts 
under Maintenance of Way and Structures, that is to say, the 
increases or decreases are divided as between those due to changes 
in rates of pay or prices of material, and those due to changes 
in man hours worked and quantities of material applied. There 
are so many different classes of labor and kinds of material used 
in equipment repairs that the equation factor method of deter- 
mining the causes of increases or decreases in the cost of labor 
and material is the most practical method for ordinary analysis. 

Comparison of Fluctuations in Man Hours and Work Per- 
formed. — The third step in our analysis is the comparison of the 
fluctuations in man hour^ with the fluctuations in the amount of 
repair work performed. 

As in the case of the maintenance of fixed property, this com- 
parison cannot be worked out with mathematical accuracy because 
no all-inclusive unit has been devised that will represent the quan- 
tity of repair work performed m each period as a basis for com- 



90 Analysis of Railroad Operations 

parison with the man hours. Only a general comparison is 
possible based on the quantities of the principal materials applied, 
the value of all material applied after allowance for changes in 
prices, and the number of units of equipment repaired. 

Classification of Repairs, — ^The repairs to cars are classified 
as light and heavy repairs and a detailed record is usually kept 
of the repair work performed in connection with heavy repairs 
to passenger cars. The record with respect to freight car repairs 
is not so complete. 

Locomotive repairs are divided into running and classified re- 
pairs. The running repairs are made at engine houses and are 
of a minor character which usually keep the locomotives out of 
service only a few hours. The classified repairs are usually made 
at the shops, although lighter classified repairs are sometimes 
made at the engine houses. 

The classified repairs are subdivided into five classes in accord- 
ance with the character of the repair work performed. A copy 
of the standard classification adopted by the American Railway 
Association is given below. 

Standard Classification of Repairs 

TO 

Locomotives and Tenders 

Class 1. 

New boiler or new back end. Flues new or reset. 

Tires turned or new. 

General repairs to machinery and tender. 

Class 2. 

New firebox, or one or more shell courses, or roof sheet. 

Flues new or reset. 

Tires turned or new. 

General repairs to machinery and tender. 

Class 3. 

Flues all new or reset, (Superheater flues may be excepted.) 
Necessary repairs to firebox and boiler. 

Tires turned or new. 

General repairs to machinery and tender. 

Class 4. 

Flues part or full set. 

Light repairs to boiler or firebox. 

Tires turned or new. 

Necessary repairs to machinery and tender. 



Maintenance of Equipment Expenses 91 

Qass 5. 

Tires turned or new. 

Necessary repairs to boiler, machineiy and tender, including one or 
more pairs of driving wheel bearings refitted. 

The number of repairs of each class made by a railroad in 
each period and the value of the material applied after allowing 
for changes in prices, when taken together, give a general idea of 
the quantity of repair work performed which can be compared 
with the man hours of labor. While these two factors cannot be 
used as the basis for specific unit costs they serve as a general 
check on the relative efficiency of the forces in each period. 

Before taking up the unit costs of maintaining equipment let 
us turn our attention to Account 314, ‘Treight train cars — 
repairs,” and consider the special complications that are encoun- 
tered in analyzing that account. 



CHAPTER XI 


ANALYSIS OF ACCOUNT 314, FREIGHT TRAIN 
CARS— REPAIRS 

As the first step in our study of Account 314, ^'Freight train 
cars — ^repairs,*' let us analyze the various items included in this 
account, which are reported to the Interstate Commerce Commis- 
sion as a single item. 

Division of Account 314 Between Repairs to Owned and 
Foreign Cars. — In the first place this account should properly 
be divided into two separate accounts, namely : 

Repairs to owned cars, 

Repairs to foreign cars, 

each of these accounts being further subdivided to give the follow- 
ing information : 

Repairs to owned cars. 

1. Repairs made on the home railroad. 

Labor 

Material 

Miscellaneous 

2. Repairs made by railroads and others and billed against the 
owner at M.CB. prices (prices prescribed in the inter- 
change rules established by the American Railway Associa- 
tion). 

3. Repairs made in outside shops at contract prices. 

4. Miscellaneous items. 

Repairs to foreign cars. 

1, Billable defects. (Owner's or carded defects.) 

A. Charges — Actual cost of repairs to foreign cars covering 
defects that can be billed against the owner 
or other party responsible for the repairs. 
Labor 
Material 
Miscellaneous 



Freight Train Cars — Repairs 93 

B. Credits — Bills against owners or other parties respon- 

sible at M.C.B. prices for items included in 

C. Net profit or loss (net of “A” and “B’’). 

2. Non-billable defects. 

labor 

Material 

Miscellaneous 

3. Net cost of foreign cars destroyed. 

The complicated nature of an analysis of the account, “Freight 
train cars — Repairs” can be readily understood when the many 
dissimilar items included in the account are noted. Unfortunately, 
many railroads do not keep their records in such a way that the 
items given above can be readily segregated, and on such roads, 
explanations of the fluctuations in the account must necessarily 
be largely a matter of guesswork. On those roads where this 
separation is kept, however, it is possible to determine the general 
causes of fluctuations with reasonable accuracy; the method of 
analysis being as follows : 

Character of Items Included in Repairs to Owned Cars.--^ 
As set forth in the foregoing table, repairs to owned cars are made 
in three ways : 

1. In the shops and with the forces of the owning railroad, 

2 . In the shops and with the forces of other railroads. Bills 
for those repairs for which the owner is responsible^ called 
“Owner’s Defects,” are made against the owner at prices 
prescribed in the Interchange Rules of the American Rail- 
way Association, commonly called “M.C.B. Prices.” Re- 
pairs for which the owner is not responsible, called “User’s 
Defects,” are made at the expense of the railroad responsible 
for the damage. 

3. In outside shops at prices specified by contract. 

As heavy repairs to freight cars are usually made by the owner, 
Item 1 given above, which covers repairs to owned cars made by 
the owning railroad, is usually the largest item in the account, 
“Freight train caars — ^Repairs.” 



94 Analysis of Railroad Operations 

The fluctuations in this item should be divided as between those 
due to changes in rates of pay and prices of material, and those due 
to changes in amount of work performed, using the equation factor 
method as explained in Chapter VIII on account of the many differ- 
ent classes of labor and kinds of material entering into these repairs. 

Item 2, repairs made by other railroads cannot be analyzed 
in this manner because they are billed at uniform prices (called 
M.C.B. prices) prescribed by the American Railway Association, 
and do not show the actual amount of labor and material expended 
by the road making the repairs. The most practical way to handle 
the matter is to treat these repairs by other railroads as a mis- 
cellaneous item and entirely separate from the repairs made on 
the home line. The total cost of these repairs on foreign lines 
can be compared with the total car days of home cars on foreign 
lines. Any unusual fluctuations in the cost per car day can be noted 
and the causes investigated. This is an important matter to follow 
up as there have been cases of excessive overbilling of repairs. 

Item 3, repairs at outside shops, usually represents heavy repair 
work deferred from a previous period and should also be segre- 
gated from current maintenance costs and treated as a special item. 

The third step in the analysis, namely, the comparison of the 
man hours of labor and the quantity of repair work performed, 
can only be developed for Item 1, the repairs made by the rail- 
road’s own forces. As explained in the previous chapter, there 
is no single unit which adequately represents the amount of repair 
work performed for the purpose of this comparison. The quan- 
tities of the principal materials applied, the cost of all material 
applied after elimination of the effect of variation in prices, and 
the number of light and heavy repairs made in each period should 
all be compared with the man hours. 

In this connection, however, it is necessary to bear in mind 
that the cost of unusually heavy repairs in which the cars are 
practically rebuilt are now charged to repairs in accordance with 
order of the Interstate Commerce Commission, effective August 1, 
1925. Prior to that date, these unusually heavy repairs to equip- 
ment were accounted for in the same manner as unusually heavy 
repairs to fixed property, that is, the old unit was retired and the 
rebuilt unit was charged to capital account as if new. 



Freight Train Cars--^ Repairs 95 

Character of Items Included in Repairs to Foreign Cars, — 
Let us now examine the second part of the account as set forth in 
the table on page 92, namely, ‘'Repairs to Foreign Cars.” 

Item 1, Billable defects, constitutes a manufacturing operation 
in which there may be a substantial element of profit or loss. 
Some small roads, particularly terminal companies on whose tracks 
a large number of foreign cars can usually be found, have made 
quite a business of repairing foreign cars. On the basis of M.C.B. 
prices in effect prior to 1918, a substantial profit was earned on 
the operation. As a rule, however, the railroads do not pay much 
attention to the net result of these foreign car repairs. In fact, 
as stated above, many of them d 6 not keep their records in such 
a way that they can tell whether they are making or losing money 
on these repairs. 

As this would seem to be a matter of common interest to all 
the roads, the separation of the account to show these items as 
outlined herein seems highly desirable. 

The method of analyzing the actual cost of labor and material 
used in making these “billable defect” repairs is the same as that 
used in analyzing the cost of repairs to owned cars made on the 
home railroad. The most important part of the study, however, 
is the comparison of the actual cost of these billable defects and 
the bills against the car owners or other responsible parties at 
M.C.B. prices with the profit or loss resulting therefrom. 

In this connection, it should be pointed out that an apparent loss 
in this item may be due to the failure on the part of the road to 
prepare the bills covering the repairs rather than to the M.C.B. 
prices being lower than cost. In order to stop these leaks, the 
first step is to separate charges to the account, “Freight train cars 
— repairs,” between repairs to home cars and repairs to foreign 
cars as outlined above. The repairs made to foreign cars should 
be reported to the bill clerk in such detail that he can immediately 
decide whether the defect is “billable” or “non-billable.” Bills 
covering the billable defects should be prepared currently and 
the entire monthly charge to freight train car repairs on account 
of repairs to foreign cars should be covered either by bills for 
the billable defects or the approval of the charge for the non- 
billable defect by the proper official. It is the writers opinion 



36 Analysis of Railroad Operations 

that the expense of such a system of auditing foreign car repairs 
would be paid for many times over by the additional amounts 
:ollected from other roads for repairs for which they are respon- 
sible under the M.C.B. rules. 

Non-Billable or User’s Defects. — Having reduced the 
mount of these non-billable defects to a minimum by careful 
inditing of the account, there will still remain substantial amounts 
:o be charged to freight train car repairs for damage to cars for 
vhich the using railroad is responsible. The best yard-stick with 
which to measure these repairs is the foreign car day, as these 
■epairs should fluctuate quite closely with the number of foreign 
:ars on the line. The record in respect to foreign railroad car 
lays is readily available, as the car day is the basis of payment 
o the owner for the use of his cars. While private line cars are 
)aid for on the basis of mileage, the car days are also available. 

Another important reason for the separation of the account, 
'Freight train cars — repairs,” between repairs to owned and 
“oreign cars and the segregation of non-billable defects from 
)illable defects is the fact that the item of non-billable defects is 
me in which the transportation department should really be more 
nterested than the mechanical department. These non-billable 
lefects are “user’s defects” caused by rough handling of cars in 
rains or yards for which the repairing railroad is responsible. 
The amount of this item should be reported currently to the trans- 
)ortation department so that the extent of the damage from this 
:ause each month will be known. 

In this connection, it should be borne in mind that damage due 
o rough handling is not confined to foreign cars. Home cars are 
iqually liable to damage from this cause. While it probably is 
lot practicable to segregate this damage to home cars, it can be 
estimated from the cost of similar damage to foreign cars. In 
tny event, the item is large enough to bear watching. 

The repairs to owned cars made on foreign roads which are 
)illed against the owner do not, as we have shown, include “user’s 
lefects” and the total cost of repairs to owned cars, both at home 
ind abroad, is not available. In theory, the cost of hon-billable 
'user’s defects” to foreign cars on the home railroad is suppo^ 
© offset the user’s defects to its own cars on foreign railroads. 



Freight Train Cars — Repairs 97 

so that the total of the account “freight train cars — repairs” will 
reflect the total cost of repairs to owned cars. The accuracy of 
this assumption is affected (1) by the element of profit or loss in 
repairs to foreign cars for billable defects, (2) by the varying 
relation of the car days of foreign cars on the home line to the 
car days of home cars on foreign lines, and ( 3 ) by the relative 
amount of rough handling on the home and on foreign lines. 

Example of the Use of Equation Factors in Analyzing 
Fluctuations in Account 314 , “Freight Train Cars — ^Re- 
pairs.” — Returning now to the analysis of the repairs to owned 
cars and the practical use of the equation factors, the following 
table has been prepared to illustrate the use of equation factors 
to determine the fluctuations due to changes in rates of pay and 
prices of material and to changes in hours worked and quantities 
of material applied. 

It will be noted that the same labor and material factors are 
used in equating labor and material used in repairs to owned and 
to foreign cars made on the home railroad, but that a different 
factor is used for equating bills for repairs made at M.CB. prices. 
This M.C.B. factor would be applicable to all such repairs wher- 
ever made as the prices are uniform for all railroads and would 
have to be developed by a special study of the M.C.B. prices. A 
factor of 1.00 is used for all miscellaneous c^rges, as these are 
ordinarily not large enough to justify a special analysis. Ip the 
foregoing example no repairs in outside shops are shown for the 
earlier period, so no equation is necessary. If, however, there 
were substantial amounts of such repairs in each period, it might 
be desirable to make a special analysis of these charges, which 
would require the developnent of a specid factor. 



Analysis of Railroad Operations 


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CHAPTER XII 


UNIT COSTS OF MAINTAINING EQUIPMENT 

In the discussion of the unit costs of maintaining fixed property 
in Chapter VIII, these unit costs were divided into two groups, 
viz. : 

1. Cost per unit of requirements. 

2. Cost per unit of repair work performed. 

A similar division can be made of the unit costs of maintaining 
equipment. 

Development of Unit Costs Based on Requirements for 
Equipment Maintenance. — ^The requirements for maintenance 
of equipment are indicated by the units of equipment maintained 
adjusted for changes in use thereof. In the case of maintenance 
of way and structures the miles of track maintained, which was 
the unit of property maintained applicable to track maintenance, 
the most important group of repair accounts, was also found to 
be applicable in a general way to the other groups of repair 
accounts, so that a unit cost of property maintained could be de- 
veloped for the total of all maintenance of way and structures 
expenses- 

There is no similar unit of property maintained which is equally 
applicable to locomotives, cars and floating equipment repairs. 
Consequently, unit costs are developed for the individual repair 
accounts and not for the total maintenance of equipment expenses. 
It was pointed out that the requirements for the maintenance of 
fixed property as indicated by the miles of track maintained were 
affected to some extent by the use made of the property and that 
the extent of this use had to be taken into consideration in com- 
paring the unit costs of property maintained in two periods. 

The element of use is a much more important factor in deter- 
mining the requirements for equipment repairs. 

Units of Requirements for Repairs Based on Use of 
Equipment.---‘The , customary unit for measuring the require- 

99' 



100 Analysis of Railroad Operations 

ments for repairs based oirthe use made of the equipment is the 
number of miles run by each unit. If the units of each class 
of equipment were of like weight and required the same amount 
of repairs per mile run, the total miles run by all units of the 
particular class of equipment under consideration could be taken 
as the measure of the requirements for repairs. While this basis 
is commonly used for car repairs, it is not satisfactory for locomo- 
tives and the analyst is confronted with the problem of devising 
a unit which will give proper weight to the additional expense of 
repairing the heavier locomotives. The measure of the repair 
requirements for locomotives commonly accepted is the locomotive 
ton-mile. This is obtained by multiplying the miles run by each 
locomotive by its weight, the locomotive ton-miles for all locomo- 
tives being obtained by adding together the ton-miles for the 
individual locomotives. It is also desirable to divide tlie locomotive 
ton-miles and the cost of locomotive repairs between freight train 
service, passenger train service, switching and work service, as 
the cost per locomotive ton-mile varies with each service and a 
change in the proportion of the locomotive ton-miles in these 
services would affect the requirements for repairs as measured 
by the total locomotive ton-miles. 

Run Out Mileage* — Another unit which reflects the require- 
ments for locomotive repairs is the run out mileage restored in 
classified repairs. The run out mileage is the number of miles 
the locomotive has run since it last received general repairs of the 
same class. When the locomotive is repaired it is supposedly put 
in first class condition, and the amount of repair work required 
usually depends on the miles run since last classified repairs. 
The run out mileage, therefore, is a closer reflection of the re- 
quirements for classified repairs than the locomotive mileage 
actually run during the period. On the other hand, the locomotive 
mileage run during the period is a closer reflection of the require- 
ments for running repairs. 

In the case of freight and passenger cars, the additional weight 
of the car is not ordinarily an element of increased cost of 
repairs. In fact the heavier car usually stands up better in service 
and costs less to repair. The car-mile, rather than the car ton- 



Unit Costs of Maintaining Equipment loi 

mile, is therefore generally used as a measure of the requirements 
for repairs. 

Availability of Car Mileage Statistics. — Car mileage figures 
for passenger train cars owned are generally readily available, it 
only being necessary to eliminate from the figures reported by each 
railroad to the Interstate Commerce Commission the miles of sleep- 
ing and parlor cars when maintained by the Pullman Company, 
and the miles of foreign passenger cars on the home line, and to 
add the miles of owned passenger cars on foreign lines included 
in the mileage statistics of those lines. It is also desirable to com- 
pare separately the mileage and repair costs of dining cars, parlor 
cars, coaches and other passenger train cars. 

Unfortunately, in the case of freight cars, the miles run on 
foreign lines are not available and the only obtainable measure of 
repair requirements is the number of cars maintained. 

The motor car-miles, which are readily available, constitute the 
best measure for repair requirements of the motor equipment of 
cars. The repairs to the car itself are included in repairs to 
freight, passenger or work cars as may be appropriate from the 
service in which the motor car is used. 

Floating Equipment Repair Costs. — Repairs to floating 
equipment are of importance on only a few roads. Mileage records 
are not required by the Interstate Commerce Commission and are 
not generally kept by the roads, as they would only be useful to a 
limited extent in analyzing repairs to tlie machinery. The repair 
costs should be separated between the different classes of equip- 
ment, such as ferryboats, tugs and barges, and compared with the 
number of boats and the days in service of equipment of each 
class. 

Work Equipment Repair Costs. — ^The total mileage of work 
equipment is reported, but it is not segregated in the published 
records between the different classes of work equipment. There 
are so many dissimilar units in this group, such as steam shovels, 
locomotive cranes, official cars, ballast cars, bunk cars, etc., that 
a study of the repair costs of the va.rious classes of work equip* 
ment and the mileage made by each class is necessary for a 
complete analysis of the subject The amounts involved in this 



102 Analysis of Railroad Operations 

group o£ expenses, however, seldom are large enough to justify 
an extended analysis. 

Effect of Deferred Maintenance on Unit Costs Based on 
Requirements. — In comparing the costs per unit of equipment 
requirements such as the locomotive ton-mile or car-mile, due 
consideration must be given, as in the case of fixed property, to 
the fact that fluctuations in these unit costs do not necessarily 
mean similar fluctuations in the unit cost of performing the actual 
repair work. With no changes in this basic unit cost the actual 
amount of repair work per unit of requirements in the current 
period may be substantially more or less than in the period with 
which it is compared. This difference may be due to repairs 
deferred from a previous period being included with the regular 
maintenance of the current period, which would swell the unit 
costs per mile run, or on the contrary to the normal maintenance 
of the current period being deferred in part, which would lower 
the costs per mile run. 

In other words, changes in unit costs per mile run cannot be 
taken as indication of corresponding changes in the efficiency of 
the repair forces. This can only be determined by a comparison 
of the unit costs of the actual repair work performed in each 
period. 

Development of Unit Costs Based on Actual Work Per- 
formed. — Units of work performed applicable to the total cost 
of repairs to any particular class of equipment as included in the 
repair accounts are not available, as explained in Chapter X. It 
is possible, however, to develop the unit cost of the major opera- 
tions entering into repairs to locomotives and cars, such as the 
cost of stripping locomotives, dropping driving wheels, turning 
tires, lining up shoes or wedges, beading flues, changing car wheels 
and drawbars, painting, etc. 

On roads where the repair forces are paid on a piecework 
basis, the unit costs of the various operations are the basis of pay- 
ment and are, therefore, a matter of record. On some roads 
where piecework is not in effect, a record of the man hours used 
in the more important classes of repair work is kept for purpose 
of checking the output and the efficiency of the forces and equip- 
ment Some record of this kind appears to be vitally necessary 



Unit Costs of Maintaining Equipment 103 

in order to determine the effectiveness of the work in different 
periods and whether fluctuations in the hours worked are justified 
by the fluctuations in the quantity of work performed. 

As a general proposition, however, the performance of the 
mechanical department is checked up by unit costs based on the 
requirements for repairs rather than on the actual work performed. 



CHAPTER XIII 


ANALYSIS OF FLUCTUATIONS IN TRANS- 
PORTATION EXPENSES 

The costs of operating the fixed property and equipment as 
distinguished from the costs of maintenance are included in the 
following general accounts : 

Transportation — Rail line 
Transportation — Water line 
Miscellaneous operations 

It was pointed out in Chapter III that only a few roads have 
water line operations. Consequently in the following discussion 
of the methods of analyzing transportation expenses, we are refer- 
ring to Transportation — Rail line only. 

Character of Expense Included in Transportation.— As 
might be expected, the character of expense involved in “opera- 
tion” is quite different from that involved in “maintenance.” The 
chief difference is the absence of charges for depreciation or re- 
tirements. We have, therefore, only three classes of expense to 
consider: 

Labor 

Material and supplies 

Miscellaneous 

Labor. — ^As in the case of maintenance, the labor items repre- 
sent the payroll labor, that is, the regular forces of the railroad 
engaged in operating the stations, signals, interlockers, and other 
fixed property and the locomotives, cars and other equipment. 

Material and Supplies. — The chief item of material and sup- 
plies in transportation expense is fuel consumed on the locomo- 
tives. So important is this item that many roads have special 
departments whose sole duty is to check the consumption of fuel 
or devise methods of eliminating waste and reducing the cost of 
this item. Other items of material used in operation are water 

104 



(i* 2 } 

Transportation Expenses \^tpS 

• 'n 

for locomotives, lubricants for locomotives and cars, station 
plies, temporary grain doors for freight cars, office supplies, etc. 

Miscellaneous. — Miscellaneous expense consists chiefly of 
payments of claims for loss and damage to freight and baggage, 
injuries to persons, and damage to property arising from fires 
along the right-of-way started by sparks from locomotives and 
from other causes. 

In our study of maintenance expenses it was apparent that 
a satisfactory analysis of the causes of fluctuations in expenses 
could not be made from the primary accounts as reported to the 
Interstate Commerce Commission chiefly because labor, material, 
miscellaneous expense and sometimes retirements, were included 
in some of the primary accounts as one item. In the case of 
transportation expenses, however, the primary accounts have been 
so classified by the Commission that with a few exceptions the 
greater part of each primary account is either labor or material 
and supplies or miscellaneous. The classification by these items 
of expense is thus automatically made to a large degree. 

Grouping of Primary Expense Accounts. — The first step 
in the analysis of transportation expenses is similar to that in 
the analysis of maintenance expenses, namely, the rearrangement 
of the primary transportation accounts of each period into groups 
in accordance with the cause and character of the expense, and the 
location of the principal fluctuations. 

This rearrangement of the accounts is given on page 167 of the 
Appendix, the amounts shown opposite each account being the 
same as in the statement of operating expenses on page 156 of the 
Appendix. 

A summary of this statement is given below and presents iii 
condensed form the principal items of transportation expense. 




io6 


Analysis of Railroad Operations 


Train and Locomotive Operation: 

Train operation 

Yard locomotive operation 

Class I Roads in 1923 

Per Cent 
Amount of Total 

$1,173,877,593 50.83 

362,688,435 15.70 

Total train and locomotive opera- 
tion 

$1,536,566,028 

66.53 

Operation of Stations and Other 
Facilities : 

Station service 

Signals and crossing protection. . . . 

Operating floating equipment 

Operating sleeping cars 

$ 351,722,822 
71,678,168 
27,789,711 
1,032,888 

15.23 

3.10 

1.20 

.05 

Total operation of stations and 
other facilities 

$ 452,223,589 

19.58 

Supervision and Miscellaneous: 

Supervision 

Casualties 

Miscellaneous 

$ 167,145,641 
87,288,987 
33,389,100 

7.24 

3.78 

1.44 

Total supervision and miscella- 
neous 

$ 287,823,728 

12.46 

Joint facilities 

$ 32,995,421 

1.43 

Total transportation 

$2,309,608,766 

100.00 


Train and Locomotive Operation. — It will be noted that the 
expenses of train and locomotive operation are about two-thirds 
of the total transportation expenses and therefore require the 
principal attention of the analyst. These expenses include the 
direct cost of operating locomotives and trains, such as the wages 
of enginemen and ti'ainmen, fuel and other supplies. They are 
sometimes called the ''out of pocket’^ expenses of operation, that 
is, they are supposed to represent the additional cost that is in- 
curred if a locomotive or train is run or the saving that results 
if it is taken off. This is substantially true of the accounts in 
these two groups taken as a whole, although some of the accounts, 
particularly enginehouse expenses and train supplies and expenses, 
include items that do not fluctuate directly with locomotive or train 
movements. 



Transportation Expenses 107 

Operation o£ Stations and Other Facilities. — ^The expenses 
of this group include the wages of agents and other station labor 
and other expenses of operating stations and terminals for the 
loading and unloading of passengers, freight, mail and express ; 
the cost of operating signals and interlockers in connection with 
the movement of locomotives and trains ; of protecting grade cross- 
ings and operating drawbridges ; of operating floating equipment 
and sleeping cars and other facilities. 

The organization required to operate these facilities is more or 
less permanent and does not fluctuate directly with the movements 
of locomotives and trains. Substantial increases in traffic can be 
handled with only small additions to the regular organization. On 
the other hand, these regular forces cannot be quickly reduced 
when business falls off. 

In view of these conditions the analysis of train and locomotive 
operation and of the operation of stations and other facilities 
follows a substantially different course as hereafter described. 

Supervision and Miscellaneous. — ^This group includes the 
cost of supervision, loss and damage to freight and other prop- 
erty, injuries to persons and other casualties and miscellaneous 
expenses. As in the case of the preceding group these expenses 
have no direct relation to the locomotive and train movements or 
the traffic handled during the period. 

Joint Facility Accounts. — ^These accounts are similar to the 
joint facility accounts under Maintenance of Way and Structures 
and Maintenance of Equipment except that they include the cost 
of operating the joint yards, tracks and facilities instead of main- 
taining them. In this connection it should be noted that no pro- 
portion of items of expense chargeable to the accounts included 
in train operation are now included in these accounts except the 
expenses of joint train service. The amounts included in these 
accounts depend upon the use made of the joint facilities in ques- 
tion but are not directly related to the general locomotive and train 
movements or the traffic handled during the period. 

Method of Analyzing Fluctuations in Transportation 
Expenses.— From this review of the character of the items in- 
cluded in the various groups into which the transportation expenses 
have been divided, it is apparent that only the expenses of the 



io8 Analysis of Railroad Operations 

first group, ‘Train and locomotive operation/' are directly re- 
lated to the movement of traffic and should be analyzed in con- 
nection therewith. As the expenses of this group arise directly 
from the operation of locomotives and trains, they lend them- 
selves readily to the development of unit costs based on the actual 
work performed. Consequently, the analysis of fluctuations in 
these accounts consists chiefly of a study of these unit costs and 
the causes of fluctuations therein. 

On the other hand, there is no satisfactory basis on which to 
develop unit costs for the purpose of checking increases or de- 
creases in the accounts of the other groups except in the case of 
operating floating equipment and sleeping cars and that part of 
station service which has to do with handling less carload freight 
at large stations. This “platform" labor at large stations, as it is 
frequently called, is not reported separately to the Commission, 
but most roads make a study of the cost per ton for handling this 
freight at large stations. 

“Operating floating equipment" includes the wages of crews, 
fuel and other direct expenses of operating the ferries, tugs, 
lighters and other floating equipment ; and also the cost of super- 
vision, shore labor and other expense in connection with loading 
and unloading lighterage freight 

“Operating sleeping cars" includes the wages of conductors, 
porters and maids employed on sleeping cars and the cost of 
supervision ; also station expenses in connection with sleeping 
car service when this expense is separable from the other station 
expenses of a railroad chargeable to account 376, “Station supplies 
and expenses." 

Both of these accounts, therefore, include direct costs of opera- 
tion which would fluctuate normally with the miles made by the 
equipment and also the costs of fixed character which would not 
fluctuate. On roads where the operation of floating equipment is 
important it would be ad’dsable to secure from the accounting 
department a division of the account between the direct cost of 
operation and the other expenses and develop unit costs for the 
former. The same is true of operating sleeping cars, but it should 
be noted that only a few railroads operate their own sleeping cars, 
this being done in most cases by the Pullman Company. 



Transportation Expenses 109 

With these exceptions, unit costs are of no particular value in 
analyzing fluctuations in the accounts other than those of train 
and locomotive operation. The principal causes of fluctuations in 
the labor accounts are usually due either to changes in the exist- 
ing organization, any addition thereto being authorized in advance, 
or to changes in the rates of pay. These changes are all matters 
of record in the accounting or operating department, and the causes 
of fluctuations in these accounts can be readily ascertained. 

Fluctuations in the cost of material and supplies included in 
the accounts of these groups are not usually of sufficient impor- 
tance to cause the analyst much concern, the principal item of ex- 
pense in these groups other than labor being miscellaneous expense 
such as payments of claims for loss and damage to freight and 
other property, injuries to persons, etc, These payments do not 
ordinarily have any direct relation to the traffic of the period. 
An unusual increase in injuries to persons or loss and damage to 
freight, for example, may be due to a series of bad accidents which 
may be coincident with a decrease in traffic. 

Special analyses of the causes of loss and damage freight, one 
of the largest of these accounts, are made by most railroads, 
although not required by the Interstate Commerce Commission, 
and the causes of fluctuation in the other casualty accounts are 
matters of record in the accounting or claim departments of the 
railroad. 

Before taking up the study of unit costs of ttain and locomo^ 
tive operation, let us review briefly the other general accounts 
relating to operation, namely. Transportation — Water line and 
miscellaneous operations. 

Transportation — ^Water Line. — ^Water line operations are 
only found on a few railroads. The distinction between water 
line operations and operating floating equipment was explained 
in Chapter III in connection with the revenues from Transpor- 
tation-water line and will be repeated for the convenience of the 
reader. The operation of car floats, ferries, etc., in direct con- 
nection with rail line operations within a port or connecting two 
rail heads, such as a ferry service across a lake, is considered 
as part of the rail line operations. The revenues are included in 
Transportation— "Rail line revenues and the expenses of pperatioh 



no Analysis of Railroad Operations 

are charged to “Operating Floating Equipment” under Trans- 
portation — Rail line. 

The direct operation by a railroad company of a line of steamers 
from one port to another entirely distinct from its rail line opera- 
tions is considered as water line operation. The revenues there- 
from are included in Transportation — ^Water line revenues and 
the expenses of operation are charged to the general account, 
Transportation — ^Water line. This general account is divided into 
the following primary accounts : 

Account 431, “Operation of vessels” 

“ 432, “Operation of terminals” 

433, “Incidental” 

A road that has extensive water line operations ordinarily keeps . 
for its own information a subclassification of these three primary 
accounts, together with statistics of operation from which unit 
costs of operation can be developed. 

Miscellaneous Operations. — ^This general account includes 
the cost of operating facilities or services, the revenues from which 
are included in incidental revenues. The titles of the primary 
accounts given below indicate the character of the service and are 
the same as the corresponding revenue accounts : 

Account 441, “Dining and buffet service” 

“ 442, “Hotels and restaurants” 

“ 443, “Grain elevators” 

“ 444, “Stock yards” 

“ 445, “Producing power sold” 

“ 446, “Other miscellaneous operations” 

The most important of these accounts is 441, “Dining and buffet 
service,” which is an essential feature of passenger train service 
on practically all railroads. The other items are found on some 
roads and not on others. They are not ordinarily large on any 
road. 

While the Interstate Commerce Commission does not require 
^ statistics of dining and buffet service, most railroads keep, for 
tlieir own information, a record of the number of meals served 



T ransportation Expenses 1 1 1 

and the cost per meal, and subdivide this account into several 
subaccounts for the purpose of analyzing the cost of the service. 
These dining car statistics have not been standardized and the 
form in which they are kept is not uniform. 



CHAPTER XIV 


STATISTICS OF OPERATION USED AS BASES 
FOR UNIT COSTS 

We have seen that unit costs may be divided into tv^ro general 
groups : 

1. Unit costs based on the units of service performed, such as 
ton miles and passenger miles from vrhich the principal 

revenues of the railroad are derived, and 

2. Unit costs based on units which record the activities of the 
various departments. 

We have seen that the activities of the maintenance departments 
are recorded by two classes of units : 

1. Units which reflect the requirements for repairs such as 
units of fixed property in service or miles run by equipment, 
and 

2. Units which reflect the actual repair work performed, such 
as the number of units repaired, quantities of material 
applied, etc. 

Distinction Between Activities of Maintenance and Trans- 
portation Departments. — While the activities of the maintenance 
departments are all undertaken with the ultimate purpose of pro- 
ducing the transportation service, the connection between the 
repairs to the fixed property or equipment and the transportation 
of passenger and freight is indirect in most cases. In other words, 
ties and rails are renewed for the purpose of making the track 
safe for the operation of the trains which carry the passengers 
and freight, but this work is not a necessary and inherent part of 
the operation of any particular train. The locomotives and cars 
are periodically given a general overhauling, in order to put them 
in condition to transport the passengers and freight, but these 
general repairs are not connected with any particular train or 
locomotive movement. In this connection, however, it should be 

xw 



StatisHcs of Operation 113 

pointed out that maintenance of equipment expenses include both 
general repairs and running repairs. The latter consist of minor 
repairs made at the enginehouses or repair tracks for the specific 
purpose of keeping the locomotive or cars in service and are 
usually directly connected with some particular train or locomo- 
tive movement. 

While running repairs are correctly classified as maintenance 
expenses and should be analyzed in connection therewith as indi- 
cated in Chapter X, they are also closely related to expenses of 
direct operation. This overlap between maintenance and opera- 
tion of equipment is also a feature of most railroad organizations, 
and should be kept in mind in analyzing the activities of the de- 
partments responsible respectively for the maintenance and for 
the operation of the equipment. 

Units Which Record the Activities of the Transportation 
Department. — The department which is responsible for the 
operation of the facilities and equipment of the railroad as dis- 
tinguished from the maintenance thereof is called the operating 
or transportation department. Its principal activities are directly 
related to the performance of the transportation service, either 
through the operation of locomotives, trains and floating equip- 
ment to transport the passengers and freight or the operation of 
stations, terminals and other facilities for the purpose of receiving 
the passengers and freight, loading them on trmns for transporta- 
tion over the railroad and unloading them at their destination. 

The activities of this department are therefore recorded both 
by units of service performed, viz., passenger miles and ton miles 
and by units which record the actual work of operating the 
facilities and equipment in order to perform this service. Wiile 
unit costs based on these statistics of performance can be developed 
for all transportation expenses, they are not helpful in analyzing 
fluctuations except for the expenses of train and locomotive, 
operation. This is due to the fact, as previously explained, that 
the expense of operating stations and other facilities and the 
i tpms in. the group entitled “Supervi^on and Miscdlaneous” are 
not directly affected by fluctuations in the movement of traffic 
Consequently, fluctuations in the cost per ton mile or per train 



114 Analysis of Railroad Operations 

mile for these items have no particular significance in analyzing 
fluctuations in these expenses. 

The expenses of train and locomotive operation on the other 
hand arise directly from the movement of traffic, and fluctuations 
in the unit costs for these expenses indicate changes in conditions 
which should be noted and investigated. 

As the first step in our study of these unit costs of train and 
locomotive operation, let us examine the statistics of performance 
on which they are based. 

Statistics of Locomotive and Train Operation. — The princi- 
pal medium by which transportation service is performed is the 
train, which is defined by the Interstate Commerce Commission 
as ‘‘a unit of equipment or a combination of units of equipment 
(exclusive of light locomotives) in condition for movement over 
tracks by self-contained motor equipment.” 

A locomotive is defined as *'a self-propelled unit of equipment 
designed solely for moving other equipment,” and a light locomo- 
tive as *‘a locomotive in condition for movement by its own 
motor equipment, uncoupled to cars, work equipment or dead 
locomotives.” 

A motor car is defined as ”a self-propelled unit of equipment 
designed to carry freight or passenger traffic and is not to be 
considered a locomotive.” 

A train ordinarily consists of a locomotive, which supplies the 
motive power, and cars which carry the passengers or freight. 
The exception is the motor car, in which the motive power and 
the space for carrying passengers or freight are both contained 
in the same unit of equipment. 

A motor car is classified as a train and also as a car, but not 
as a locomotive. A locomotive with a caboose is classified as a 
train. A light locomotive (without a caboose attached) is not 
classified as a train but as a locomotive. 

A train, however, cannot perform any transportation service 
unless it moves. The movement of a train the distance of one 
mile is called a train mile, the train miles for the trip being the 
distance between terminals. The miles run by the locomotives 
and cars in the train are called locomotive miles and car miles 
respectively. Train miles and car miles are based on distances 



Statistics of Operation 115 

run between terminals or stations, but locomotives, in addition 
to this mileage between terminals and stations, are allowed mileage 
going from the enginehouse to the train yard at the beginning 
of the trip and returning at the end of the trip when this distance 
is half a mile or over; and also any additional road mileage made 
on account of doubling hills, running for water, etc. 

The mileage made by train locomotives switching cars at termi- 
nals or stations is classified as train switching locomotive miles, but 
the expense of this work is included in “Train operation.” Most 
of the switching at yards and terminals, however, is performed 
by engines assigned to yard switching service and is classified 
as yard switching locomotive miles, the expenses thereof being 
included in “Yard locomotive operation.*" These switching loco- 
motive miles do not represent the actual miles run by the locomo- 
tives, but are estimated on the basis of six miles for every hour 
of switching service. 

The locomotive miles are intended to represent all of the miles 
made by the locomotive either run in connection with trains, light 
or in switching service, while the car miles represent only those 
miles made by cars in train movement. Cars make many miles 
in switching movements in yards and terminals and at intermediate 
stations but this mileage is not recorded. 

The train miles, locomotive miles and car miles are classified 
in accordance with the Classification of Train Miles, Locomotive 
Miles and Car Miles for Steam Roads prescribed by the Interstate 
Commerce Commission. A copy of this classification will be 
found on page 353 of the Appendix. The reader is urged to study 
this classification carefully, as it is the foundation for the statistics 
of locomotive and train operation on which the unit costs are 
based. 

Conductor’s Train Report — ^We have seen that the operation 
of a train results in train mil’^, locomotive miles and car miles. 
The function of the cars is to transport passengers or freight 
and the distance the passengers and freight are carried is measured 
in ton miles and passenger miles, as previously explained in the 
chapter on freight and passenger service statistics. Ton miles are 
divided into ton miles of revenue freight and ton miles of non- 
revenue freight. The ton miles of all freight (revenue and non- 



Ii6 Analysis of Railroad Operations 

revenue) based on the weight of the contents of the cars are called 
‘*net ton miles” to distinguish them from the gross ton miles based 
on the weight of both cars and contents. 

These statistics of train operation are obtained in most part 
from the conductor's trsfin report, which, like the waybill, is one 
of the most important basic statistical records on a railroad. A 
sample of a conductor's train report for a freight train is given 
on page 372 of the Appendix. The computation of the train miles, 
train hours, car miles, gross ton miles and net ton miles is based 
on data contained in this report, although most of this work is not 
performed by the conductors but by clerks in the office of the car 
accountant or in the ‘bureau compiling the statistics of train per- 
formance. The locomotive- miles are usually obtained from the 
engineer’s report as light locomotive mileage and switching mile- 
age would not be covered by the conductor's train report. 

The* ton miles of revenue freight produced by a freight train 
or the passenger miles produced by a passenger train represent the 
units of actual transportation service performed from which the 
railroad derives its principal revenues. This actual transportation 
service performed is much less than the potential service resulting 
from train operation. While some trains ,are. loaded to capacity 
with passengers or freight, others may consist entirely of empty 
cars or partly of empty and partly of loaded cars. The movement 
of all of these cars, whether loaded with revenue or nonrevenue 
freight or empty, as well as light locomotive movements on ac- 
count of unbalanced traffic, are all included in the cost of train 
operation. The production of revenue ton miles and passenger 
miles, therefore, reflects only a part of the work from which the 
expenses arise and unit costs based thereon are not as significant 
as those based on the locomotive miles, train miles and gross ton 
miles which reflect all of the work from which these expenses arise. 

Unit Costs of Yard Locomotive Operation. — We have seen 
that no record is kept of the distance that the cars or their contents 
are moved in yards and terminals and that yard locomotives are 
not credited with the production of car miles, ton miles or pas- 
senger miles. This movement is all considered incidental to the 
movement in trains between terminals for which the transportation 
charge is made. 



Statistics of OpercUton 117 

Yard switching locomotives do, however, in certain cases per- 
form a switching or transfer service which is not a part of a line 
movement in a train over that railroad. In such cases a switching 
charge is made, the revenue therefrom being included in Account 
110, “Switching,” instead of Account 101, “Freight,” as explained 
in Chapter III. No ton miles are, however, recorded for such 
movements nor is the locomotive mileage producing them kept 
separate from the other yard switching locomotive mileage. 

The statistics of work performed in yard locomotive operation 
reported to the Interstate Commerce Commission by Oass 1 rail- 
roads are very meager as compared with the statistics of train 
operation, and are practically confined to the number of yard 
switching locomotive miles during the year, no figures of cars 
handled being reported except by switching and terminal companies. 

Most roads, however, prejare currently statements for their 
own information which show for each of the principal yards 
the number of switching locomotives operated, the locomotive 
hours or miles (the miles being estimated on the basis of six miles 
per locomotive hour), the number of cars handled and the ex- 
penses. As the actual miles run by the locomotives and cars in. 
switching movements are not recorded, the unit costs per loco- 
motive mile developed from these statistics are not as significant 
as the cost per locomotive mile developed from the statistics of 
train operation. 

Fluctuatipns in the cost per yard switching locomotive mile and 
per car handled for each yard can be analyzed in connection with 
changes in the number of cars handled or the character of traffic 
passing through the yard in question but there is no satisfactory 
common unit by which the work performed per yard switching 
locomotive mile in the various yards can be compared and which 
can be used as the basis for the cost per yard switching locomotive 
mile for the entire road. This is due to the great variation in 
the character of the work performed by switching locomotives 
at different yards which makes it impracticable to develop a unit 
of work performed similar to the gross ton mile in train servi<M. 

Division of Expenses of Train Operation.Between Frei^t 
and Passenger. — By reference to the classification of train miles, 
locomotive, miles ^d car miles cm psge 353 of fte Appendix 



ii8 Analysis of Railroad Operations 

it will be noted that train miles are divided into the follow- 
ing classes : 

Transportation service 
Freight 
Passenger 
Mixed 
Special 
Work service 

The direct expenses of operating transportation train service 
are included in the cost of train operation, whereas the direct 
expenses of operating work trains are not included in these ex- 
penses of train operation but are charged to the particular expense 
account involved. For example, the cost of work train service 
engaged in the distribution of track material is charged to Account 
220, '‘Track laying and surfacing’* ; the cost of official train service 
for the Transportation Department is charged to Account 371, 
“Superintendence,” etc. 

The expenses of train operation are divided between freight 
and passenger train service, the cost of mixed and special trains 
being divided between freight and passenger on the basis of the 
number of miles of freight and passenger train cars in these ti-ains. 
The mixed and special train miles (and locomotive miles) are 
divided between freight and passenger on the same basis as the 
expenses. 

With the expenses and statistics of train operation separated 
between freight and passenger, we are now ready to develop unit 
costs of train operation for each service. 

Unit Costs of Freight Train Operation. — ^The unit costs 
of freight train operation usually are based on three units, viz. : 

Locomotive miles 

Train miles 

Gross ton miles (expressed in thousands) 

A convenient method of setting up the costs and statistics of 
freight train operation, in order to show the relation between the 
unit costs per locomotive mile, train mile and 1,000 gross ton 
miles, is given in the following table : 



StaiisHcs of Operation 119 

Freight 

Proportion 

Account No. Cost of Freight Train Operation 

400 1. Enginehouse expenses $698,762 

392-3 2. Train enginemen 1,688,777 

394-5-6 3. Fuel for train locomotives 3,103,972 

397-8-9 4. Other locomotive supplies 313,047 


5, Total locomotive expense $5,804,558 

401 6. Trainmen 1,906,892 

402 7. Train supplies and expenses 628,639 


8. Total freight train operation $ 8,340,089 

9. Train miles 7,688,362 

10. Locomotive miles 8,257,548 

11. Gross ton miles 11,848,723,000 

Averages 

12. Locomotive miles per train mile (Item 

10 - J- Item 95 1.074 

13. Gross ton miles per train mile (Item 

11- Mtem9) 1,541 

14. Gross ton miles per locomotive mile (Item 

11 Item 10) 1,435 

Unit Cost per Locomotive Mile 

15. Enginehouse expenses (Item 1 -5- Item 10) $0,085 

16. Train enginemen (Item 2 -r- Item 10) ... . 0.204 

17. Fuel for train locomotives (Item 3 Item 

10) 0.376 

18. Other locomotive supplies (Item 4 -r* Item 

10) ; 0.038 


19. Total locomotive expense (Item S-s- 

Item lOJ $0,703 

Unit Cost per Train Mile 

20. Total locomotive expense (Item 5 -5- Item 

gy , • ,T $0,755 

21. Trainmen (item *6 item 9) 0.248 

22. Train supplies and expenses (Item 7 

Item 9) 0.082 


23. Total freight train operation (Item 


8 -Item 9) $1,085 

Unit Cost per 1,000 Gross Ton Miles 
24. Total freight train operation (Item 8-^ 

Item 11) $0,704 


In studying the unit costs per locomotive mile, train mile and 
gross ton mile the following relationship should be noted: 

1 . The unit cost per train mile for locomotive expense (Items 
1 to S inclusive) can be developed by applying to the cost per 
locomotive mile the average locomotive miles per train mile, viz. : 



120 Analysis of Railroad Operations 

a. Total locomotive expense per locomotive mile 

(Item 19) $ .703 

b. Locomotive miles per train mile (Item 12) . . . • 1.074 

c. Total locomotive expense per train mile (a X b) 

(Item 20) 755 

The cost per train mile for these various items of locomotive 
expense depends therefore on the basic cost per locomotive mile 
times the number of locomotive miles per train mile. 

2. The unit costs per thousand gross ton miles can be developed 
by dividing the cost per train mile or locomotive mile by the gross 
ton miles per train mile or locomotive mile. 

a. Total cost of freight train operation per train 


mile (Item 23) $1,085 

b. Gross ton miles per train mile (Item 13) 1,541 


c. Total cost of freight train operation per thou- 
sand gross tons mile (a-r-bXiOOO) (Item 24) .704 

The foregoing method of developing the unit costs of freight 
train operation differs from that followed on Form OSC Locomo- 
tive and Train Costs as prescribed by the Interstate Commerce 
Commission * in the following respects : 

1. Form OSC Locomotive and Train Costs as reported to the 
Interstate Commerce Commission includes the total cost of repairs 
to road locomotives (general and running repairs) as one of the 
items of freight train operation for which the unit cost per train 
mile is computed. 

While running repairs to locomotives and cars are properly 
includable in the cost of freight train operation for purposes of 
developing unit costs per train mile, general repairs are not directly 
affected by train miles and should not be included in this group 
of expenses for the reasons stated in Chapter XIII. Unless 
a separation of both locomotive and car repairs between general 
and running repairs can be made, it would seem advisable to ex- 
clude all equipment repairs from the cost of train operation, as 
the ratio between running and general repairs varies substantially- 
in different periods and unit costs are apt to be misleading. : 

*Form OSC was discontinued with the report for December, 1924, but 
the r^ort is being continued by some raSroads for dieir own mfonhatioit 



Statistics of Operation I2I 

2. Form OSC does not give the cost per locomotive mile for 
the various items of locomotive expense, these items being reported 
on a train mile basis only. In view of the fact that the locomotive 
mile is the controlling factor in these items of locomotive expense 
to a much greater extent than the train mile, it seems desirable 
to use the locomotive mile as the basis for the unit costs for each 
item, giving only the total locomotive expense per train mile. 

The cost of these items of locomotive expense per train mile 
depends on two factors — the cost per locomotive mile and the 
locomotive miles per train mile. Fluctuations in the cost per train 
mile, therefore, may be the result of fluctuations in one or both 
of these two factors. Consequently, an analysis of train mile 
costs requires the development of locomotive mile costs and the 
arrangement suggested above appears to be the most practicable 
way of handling the analysis. 

Statistics and Unit Costs of Fuel Performance. — The cost 
of locomotive fuel is such a large item of expense that special 
attention is given to the statistics of fuel consumption. The cost 
of fuel per 1,000 gross ton miles as well as per locomotive mile 
is usually developed in order to give effect to the weight bandied 
by the locomotives. The basic statistics and the method of develop- 
ing the unit costs for two periods are given in the following table: 

Increase or Decrease 


1. 

Cost of locomotive fuel... 

Current 

Period 

$3,103,972 

Previous 

Period 

$2,755,770 

Amoaiit 

$348,202 

Per 

Cent 

12.64 

2. 

Tons of fuel consumed .... 

1,025,983 

952,440 

734143 

7.72 

3. 

Locomotive miles 

8.257,548 

7,511,030 

746,518 

9.94 

4. 

Gross ton miles (thousands) 

11,848,723 

10,265,780 

1482,943 

15.42 

s. 

Averages 

Cost of fuel per ton (Item 

1 Item 2) 

$3,025 

$2,893 

$0,132 

4JS7 

6. 

Tons of fuel per locomotive 
mile (Item 2 -s- Item 3)* 

0.124 

0.127 

(10.003 (1247 

7. 

Gross ton miles per locomo- 
tive mile (Item 4 -5- Item 3) 

1,435 

1,367 

68 

4.96 

a. 

Tons of fuel per 1,000 gross 
ton miles (Item 6 Item 
7X1,OOD)* 

0.0866 

0.09^ 


9. 

Cost per locomotive mile 
(Item 6 X Item S) 

$0J7S 

^.367 

$0,008 

2.18 

10 . 

Cost per 1,000 gross ton 
miles (Item 9 Item 7 X 
1,000) ; 

$.2619 

$.2684 

(10.0065 (12.42 


. *Tlil8 average may be expteiped ia pottttdi. 



122 Analysis of Railroad Operations 

Fuel consumption statistics and unit costs frequently are based 
on gross ton miles directly without developing the consumption 
and cost per locomotive mile. It has been the writer's experience, 
however, that the relation of cause and effect is brought out more 
effectively if the consumption is first developed on a locomotive 
mile basis. After all, it is the locomotive which bums the coal 
and the consumption by the locomotive is at a greater or less 
rate according to the tonnage handled. Of course other factors 
than tonnage also affect the consumption per locomotive mile, such 
as the condition of the locomotives, delays on the road, fuel saving 
devices, such as superheaters and arches, and other causes not 
related to tonnage. 

The analysis of the fuel performance in the current period as 
compared with the previous period based on the statistics given 
in the foregoing table would be as follows : 

1. There was a decrease of 2.37 per cent in the consumption 
of fuel per locomotive mile (Item 6). 

2. This decrease in fuel consumption per locomotive mile was 
secured in spite of heavier loading per locomotive (gross 
ton miles per locomotive mile, Item 7, increased 4.96 per 
cent). 

3. This combination of a decrease of 2.37 per cent in the con- 
sumption of fuel per locomotive mile and an increase of 
4.96 per cent in the locomotive load resulted in a decrease 
of 6.96 per cent in the fuel consumed per 1,000 gross ton 
miles (Item 8), the usual measure of fuel efficiency. 

4. This increase in fuel efficiency was not, however, fully trans- 
lated into decreased costs, because the price of coal went up 
$0,132 per ton or 4.57 per cent. The net result, therefore, 
was a decrease of only 2.42 per cent in the co-st of fuel per 
1,000 gross ton miles (Item 10). 

Formula for Dividing Fluctuations in Cost of Fuel Be- 
tween Price, Tonnage Handled and Rate of Consumption. — 
Fluctuations in the cost of fuel are also analyzed in the same 
manner as fluctuations in the cost of material applied in main- 
tenance work, that is, the causes of increases or decreases are 



123 


Statistics of Operation 

divided as between changes in prices and changes in quantities 
used. In addition, the latter cause is usually subdivided as 
between changes in gross ton miles and changes in consumption 
per gross ton mile. On this basis the increase of $348,202 in 
locomotive fuel shown in the foregoing table would be divided 
as follows (in accordance with the formulae suggested on 
page 70) : 

I. Increase due to change in price — 

Increase in price per ton X 

Tons used previous period 

$.132 X 952,440 tons = approximately $125,722 

II. Balance of increase — due to change in 
quantities used — 

Increase in quantities used X 

Price per ton current period 

73,543 tons X $3,025 = approximately $222,480 

Total increase $348,202 

III. Increase of $222,480 due to change in quantities used (11) 
is divided as follows: 

A. Increase due to additional tonnage handled — 

Increase in gross ton miles X 
Consumption per gross ton mile in current period 
X price per ton current period 
1,582,943 gross ton miles X *0866 tons 
X $3,025 = approximately $414,673 

B. Decrease due to changes in rate of consump- 

tion — 

Decrease in tons of coal per gross ton 
mile X 

Gross ton miles previous period X ptice 
per ton current period 
.0062 ton X 10,265,780 gross ton miles 
X $3,025 = approximately $192,193 


Net increase due to change in quan- 
tities used $222,480 



124 


Analysis of Railroad Operations 

The increase of $348,202 in the cost of fuel is thus divided 
approximately between three causes as follows; 


Price $125,1^2 

Tonnage handled 414,673 

Rate of consumption dec. 192^-93 


Net increase $348,202 


Unit Costs of Passenger Train Operation. — ^The procedure 
followed in developing the unit costs of passenger train operation 
is similar to that used for freight train operation except that the 
anal 3 rsis of fuel consumption is usually based on passenger car 
miles instead of gross ton miles. In view of the increase in the 
use of all steel passenger equipment and the difference in the 
weight of these cars and the older wooden cars, it would seem 
better practice to develop gross ton miles for passenger train 
service on the same basis as for freight train service, except that 
the weight of passengers and other contents of cars can be disre- 
garded as it has no appreciable effect on the cost of fuel and the 
total cost of passenger train operation per 1,000 gross ton miles. 



CHAPTER XV 


ANALYSIS OF FLUCTUATIONS IN THE REV- 
ENUE TRAIN LOAD IN FREIGHT SERVICE 

In the preceding chapter, we discussed the use of operating 
statistics as bases for the cost per train mile and other unit costs 
of freight train operation. These statistics are also used in 
analyzing the changes in the revenue train load as affecting the 
revenue per train mile in freight service. It was pointed out in 
Chapter VII that fluctuations in the ratio of freight train expenses 
to freight revenue could be analyzed most effectively by comparing 
the revenues and expenses per train mile and determining the 
causes of fluctuations in each. The causes of fluctuations in the 
expenses per train mile were discussed in the preceding chapter. 
The revenue per train mile, as pointed out in Chapter V, depends 
upon the revenue per ton mile and the revenue tons per train mile 
or revenue train load. The causes of fluctuations in the revenue 
per ton mile were discussed in Chapter V and it is, now proposed 
to discuss the causes of changes in the revenue train load in 
freight service. The causes of fluctuations in the revenue train 
load in passenger and allied services were indicated in Chapter V 
and do not require further consideration at this time. 

The Significance of the Revenue Train Load. — ^The revenue 
ton miles and passenger miles produced in freight and passenger 
train service represent the actual transportation service performed 
from which a railroad derives its principal revenues but, as previ- 
ously noted, this actual service performed is very much less than 
the potential service which could be performed if all trains were 
loaded to capacity. The aim of the transportation department is 
to reduce the excess of potential over actual service so far as pos- 
sible, or, in other words, to handle the passenger and freight with 
the minimum number of train miles consistent with good service 
and economical operation. 

Passenger train ^rvice being fixed by schedules established in 



126 Analysis of Railroad Operations 

advance cannot be changed from day to day to meet the varying 
conditions of passenger travel, but freight train service can be 
adjusted to a large extent in accordance with the transportation 
service required. 

The index of the achievements of the transportation department 
in this respect is the increase in the number of revenue ton miles 
or passenger miles per train mile or, in simpler terms, the revenue 
train load. 

Revenue Train Load in Freight Service. — ^The revenue train 
load in freight service is an average figure for all trains and varies 
from no revenue tonnage on trains of empty cars to several 
thousand tons of revenue freight on heavy coal drags. 

Train Load o£ All Freight. — It was pointed out in Qiapter 
IV that the revenue freight did not represent all of the freight 
carried by the freight trains but that a substantial tonnage of 
nonrevenue or company freight was also carried. Consequently, 
the average train load of all freight, both revenue and nonrevenue, 
is greater than the revenue train load; the difference being the 
average tons of nonrevenue freight per train. 

The statistics of freight train performance compiled from the 
conductor’s train report do not ordinarily distinguish between 
revenue and nonrevenue ton miles and consequently only the 
train load of all freight usually is derived from these statistics. 

Except for the element of company freight, the fluctuations in 
the train load of all freight are due to the same causes as the 
fluctuations in the train load of revenue freight, so that the analysis 
based on the statistics of freight train performance is substantially 
complete. 

Principal Elements Affecting Net Train Load. — ^The princi- 
pal elements involved in these fluctuations in the train load of all 
freight, usually called the net train load, are: 

Gross ton miles 
Train miles 
Net ton miles 

Stated in simple terms, the gross ton miles represent the weight 
of cars and contents moved over the railroad by the transportation 
department during the period. The train miles represent the . 



Revenue Train Load Fluctuations 127 

train movement required to handle this tonnage. The net ton 
miles represent the weight of the contents of the cars, that is, the 
freight moved during the period as distinguished from the total 
weight of cars and contents including the weight of empty cars. 

Relation Between Gross Ton Miles, Train Miles and Net 
Ton Miles. — ^The relation between these three elements is shown 
in the following table : 


1. Gross ton miles 450,000 

2. Train miles 200 

3. Net ton miles 250,000 

Averages 

4. Gross ton miles per train mile or gross train 

load in tons (Item 1 -r- Item 2) 2,250 

5. Ratio of net to gross ton miles expressed as a 

percentage (Item 3-Mtem 1) 55.5% 

6. Net ton miles per train mile or net train load 

in tons (Item 3-5- Item 2) also (Item 4X 

Item 5) l;250 


Increases in the gross train load mean that the transportation 
department is handling the gross ton miles with a relatively 
smaller train movement, while decreases in the gross train load 
mean the reverse. These fluctuations in the gross train load, 
however, are not always carried through to the net train load in 
the same proportion. 

The net train load depends upon the gross train load and the 
ratio of net ton miles to gross ton miles. This ratio of net to 
gross ton miles is the relation of the tonnage of freight to the 
total weight of the cars and contents including empty cars. If 
this ratio remains constant the fluctuations in the gross train load 
will be carried through in the same proportion to the net train load ; 
if the ratio changes, the percentage of fluctuation in the net train 
load will be different from that of the gross train load. 

Take for example a movement of coal from mines at A, to the 
market at B assuming (1) a haul of 100 miles, (2) a load of 
50 tons, (3) a car weighing 20 tons without the load (usually 
called the light weight or tare) and (4) an empty return movement 
to the mines of 100 miles for another load. 

The rdation between the net ton miles and the gross ton miles 
for the round trip of the car from the mines to the market and 
return would be expressed as follows: 



128 


Analysis of Railroad Operations 


Net Ton Miles: 

1, 50 tons of coal for 100 miles equals 5,000 

Tare Ton Miles : 


2. Tare weight of loaded car movement— 20 tons for 

100 miles equals 

3. Tare weight of empty car movement— 20 tons for 

100 miles equals 

4. Total gross ton miles (weight of cars and con- 

tents) 

5. Ratio of net to gross ton miles (Item 1 H- Item 4) 


2,000 

2,000 


9,000 

55.5% 


The ratio of net to gross ton miles resulting from the movement 
of this single car was therefore 55.5 per cent. 

If we extend the movement of a single car to a train load, say 
SO loaded cars from A to B, we have this same relation between 
net and gross ton miles expressed in the statistics of freight train 
performance as follows: 


1. Train miles A to B 100 

2. Train miles B to A 100 


3. Total train miles 200 

4. Net ton miles A to B 250.000 

1 Net ton miles B to A 


6. Total net ton miles 250,000 

7. Tare ton miles A to B 100!000 

8. Tare ton miles B to A 100,000 


9. Total gross ton miles 450,000 


10. Gross train load (tons) A to B 

11. Gross train load (tons) B to A 

12. Gross train load (tons)^ — Average 

both directions 


(Items 4 + 7) 
(Item 1) 
(Items 5 + 8) 
(Item 2) 
(Item 9) 
(Item 3) 


13. Ratio of net to gross ton miles 

14. Net train load (tons)— Average both 

directions 

(Also Item. 12 X Item 13) 


(Item 6) 
(Item 9) 
(Item 6) 
(Item 3) 


3,500 

1,000 

2.250 

/ 

SS5% 

1.250 


RatiQ of Net to Gross Ton Miles.— Tfaese conditions pf car- ' 
l<»ditig and balance of traffic are expressed by the ratio of net to 



Revenue Train Load Fluctuations 129 

OSS ton miles. An increase in the gross train load without any 
ange in the ratio of net to gross ton miles will produce a propor- 
inal change in the net train load. On the other hand, it sometimes 
ppens that a change in the ratio of net to gross ton miles due, 
y to heavier loading of cars or return loading for the empties, 
ly result in changes in the net train load without corresponding 
anges in the gross train load. 

As changes in the ratio of net to gross ton miles due to changes 
the character of traffic affecting average car loading and the 
oportion of loaded to total car miles are causes beyond the 
ntrol of the transportation department it is customary to measure 
2 results in train loading obtained by this department by the 
ictuations in the gross train load rather than by fluctuations in 
s net train load, on the same theory that the cost of train opeik- 
tn was measured by the cost per gross ton mile rather than the 
st per net ton mile. As a matter of fact fluctuations in the 
OSS train load are frequently due to changes in the character or 
lance of traffic beyond the control of the transportation depart- 
2nt, while changes in the ratio of net to gross ton miles aff^ng 
e net train load may be due to better car loading at local stations 
■d elimination of useless empty car movement due to more 
reful supervision by the transportation department. 

It is apparent, therefore, that the transportation department 
nnot be held entirely responsible for all fluctuations in the gross 
ain load nor entirely blmneless for those fluctuations in the; 
it train load due to changes in the ratio of net to gross ton miles. 
In order to properly locate the responsibility for fluctuations 
the gross and net train load, it is necessary to analyze all of 
e elements entering into those fluctuations. 

Typical Analysis o£ Fluctuations in Revenue Train Load, 
-The basic statistical data and the averages derived therefrom 
hich are necessary for an analysis of the causes of fluctuations 
. the revenue train load are given in the following table : 



130 Analysis of Railroad Operations 



Freight Train Performance 



BASIC STATISTICS AND AVERAGES USED IN ANALYZING FLUCTUATIONS 

IN THE 


revenue train load 






Increase or Decrease 



Current 

Previous 


Per 


Basic Statistics 

Period 

Period 

Amount 

Cent 

1 . 

Train miles 

7,688 

6,540 

1,148 

17.5 

2 . 

Locomotive miles 

8,257 

6,957 

1,300 

18.7 

3. 

Loaded car miles 

226,439 

189,987 

36,452 

192 

4. 

Empty car miles 

84,646 

66,102 

18,544 

28.1 

5. 

Total car miles 

311,085 

256,089 

54.996 

21.5 

6 . 

Revenue ton miles 

4,673,212 

3,930,797 

742,415 

18.9 

7, 

Nonrevenue ton miles 

380,299 

372,790 

7,509 

2.0 

8 . 

Net ton miles (Total revenue 






and nonrevenue) 

5,053,511 

4,303,587 

749,924 

17.4 

9. 

Tare ton miles (Weight of 






cars without load) 

6,795,212 

5,415,462 

1,379,750 

25.5 

10 , 

Gross ton miles (Weight of 






cars and contents) 

11,848,723 

9,719,049 

2,129,674 

21.9 

11 . 

Rating ton miles * 

16,514,000 

13,914,000 

2,600,000 

18.7 

12 . 

Train hours 

604 

508 

96 

18.9 


Averages 





A, 

Revenue train load (tons) 






(Item 6 -5“ Item 1; also B 






X C) 

608 

601 

7 

1.1 

B. 

Per cent revenue to net ton 






miles (Item 6 -f- Item 8 ) . . 

92.5 

91.3 

1.2 

1.3 

c. 

Net train load (tons) (Item 






8 -5" Item 1 ; also D G) 

657 

658 

d 1 

d 02 

D, 

Per cent net to gross ton 






miles (Item 8 -f- Item 10) 

42.6 

44.3 

d 1.7 

d 3.8 

E. 

Car load (tons) (Item 8 -r- 






Item 3) 

22.3 

22.7 

d 0.4 

d 1.8 

F. 

Per cent loaded to total car 






miles (Item 3 -r- Item 5) . 

72.8 

742 

d 1.4 

d 1.9 

G. 

Gross train load (tons) 






(Item 10 -r* Item 1; also 






HXI) 

1541 

1486 

55 

3.7 

H, 

Locomotive miles per train 






mile (Item 2 Item 1) . 

1.074 

1.064 

.010 

0.9 

I. 

Gross locomotive load (tons)i*^- 





(Item 10-^ Item 2: also 






J X K) 

1,435 

1,397 

38 

2.7 

J. 

Per cent rating handled (Item 






10 -T- Item 11 ) 

71.75 

69.85 

1.90 

2.6 

K. 

Rating per locomotive (Item 






11 Item 2 ) 

2,000 

2,000 

. . . 


L. 

Gross ton miles per train 






hour (Item 10 Item 12 ; 






also M X G) 

19,617 

19,132 

505 

2.5 

m! 

Train speed (train miles per 






train hour (Item 1 -j- Item 






12 ) 

12.7 

12.9 

d, 0.2 

d 1.6 


Rating ton miles, which have not been mentioned before, i 

are computed 

for each 

tnp by multiplying tnc rating of the locomotives in 

tons by the miles run. The rating. 

la 

the theoretical load the locomotive should haul and may 

change several times. 

dui 

*ing the . run on account of different grades. Such changes in rating are taken into. 

. eoxuki,aeratio& m computing the. rating ton miles for the entite trip. . ; 




Revenue Train Load Fluctuations 131 

The figures in the foregoing table are based on the operations 
of a typical railroad. The averages have been arranged to show 
the breaking back of the revenue train load into its component 
parts and the effect of changes in these averages on the revenue 
train load. It will be noted that in this case an increase in the 
gross train load of 3.7 per cent was not carried through to the net 
train load, which showed a decrease of .2 per cent. This was due 
to a decrease in the ratio of net to gross ton miles of 3.8 per cent, 
resulting from a smaller car load and a less favorable balance 
of traffic (percentage of loaded to total car miles) (Item F). 

Gross Ton Miles per Train Hour. — Special attention is di- 
rected to Item L, Gross ton miles per train hour, which is the 
product of the gross train load and the train speed (train miles 
per train hour). The aim of the transportation department is 
to move the traffic (gross ton miles) with the smallest number 
of train miles consistent with good service and economical opera- 
tion. The index of performance in this respect without reference 
to service and cost of operation is the gross train load. An increase 
in the gross train load should normally bring with it a decrease 
in the cost per gross ton mile, the index of economical operation 
so far as the transportation department is concerned. It some- 
times happens, however, that the increase in the gross train load 
results in overloading and long delays on the road, so that the cost 
per train mile increases to such an extent that the effect of the 
heavier train load is entirely offset and the cost per gross ton mile 
shows an increase instead of a decrease. 

The train hours reflect the cost of wages and fuel, the principal 
items in the cost of train operation, except when there have been 
unusual changes in rates of pay or prices of fuel. Conse- 
quently an increase in the grossi ton miles per train hour should 
normally indicate a decrease in the cost per gross ton mile. The 
gross ton miles per train hour is therefore used as the index of 
the operating efficiency of the transportation department in prefer- 
ence to the gross train load. 

The element of good service is still to be considered, but this 
cannot be measured by statistics of train operation. It must be 
measured by other means, such as passing reports, records of 
delays to trains and to cars in yards, car mileage statistics, etc. 



132 Analysis of Railroad Operations 

As the subject of this book is primarily the analysis of the 
fluctuations in the revenues and expenses, it is not the purpose 
of the author to enter into a detailed discussion of the methods of 
analysing the efficiency of the operation by means of operating 
statistics. This is in itself a broad subject about which an entire 
book might well be written. It is therefore the author’s pur- 
pose merely to indicate the general distinction between the two 
averages most commonly used as indices of the efficiency of freight 
train performance, namely, the gross train load and the gross ton 
miles per train hour, and their relation to the unit costs of freight 
train operation. 



CHAPTER XVI 


ANALYSIS OF FLUCTUATIONS IN TRAFFIC 
AND GENERAL EXPENSES, TAXES AND 
RENTS 

The expenses of maintenance and operation represent about 95 
per cent of railway operating expenses and the principal attention 
of the analyst, therefore, is directed toward the explanation of 
fluctuations in those accounts. The general character of the items 
of expense included in traffic and general expenses was explained 
in Chapter VI. They represent to a large degree the cost of a 
permanent organization which is not affected by fluctuations in 
traffic. Any fluctuations in these expenses is in most cases the 
result of changes in the organization which have been duly au- 
thorized by the proper authorities. Such analysis as is made of 
these expenses is therefore more historical than corrective. 

Primary Accounts Included in Traffic and General Ex- 
penses. — ^The table below gives the primary accounts included in 
traffic and general expenses. The percentage of the amount 
expended for each primary account to the total of the respective 
general account by all Qass I roads in 1923 has been given in 
order to show the relative importance of each. The titles of the 
primary accounts indicate the character of the expense included 
in each, and a detailed description of the items included therein 
will be found in the Qassification of Railway Operating Revenues 
and Expenses in the Appendix (see page 242 for Traffic Expenses 
and page 281 for General Expenses), It is not practicable to 
devdop unit costs in connection with the atralsrsis of fluctuations 
in these accounts. The amounts involved are usually smafl ahd 
tire causes of any unusual changes can be obtained freon the 
records of the accounting department 



134 


Analysis of Railroad Operations 


Tumc Expenses 


Qass I Railroads in 1923 


Primary 

Account 

Number 

Description 

Amount 

Per Cent 
of Total 

Traffic Expenses 

351 

Superintendence 

$31,407,633 

33.42 

352 

Outside agencies 

37,187,241 

39.57 

353 

Advertising 

10,158,749 

10.81 

354 

Traffic associations 

2,248,593 

2.40 

3SS 

Fast freight lines ........... 

54,700 

.06 

356 

Industrial and immigration 
bureaus 

1,918,777 

2.04 

357 

Insurance 

28,211 

.03 

358 

Stationery and printing 

10,857,873 

11.55 

359 

Other expenses 

114,909 

.12 


Total traffic expenses ... 

$93,976,686 

100.00 


Generai. Exiensbs 

Per Cent 
of Total 


Amount General Expenses 


451 

Salaries and expenses of gen- 
eral officers 

$17,120,405 

10.56 

452 

Salaries and expenses of 
clerks and attendants 

87,860,354 

54.22 

453 

General office supplies and ex- 
penses 

6,821,807 

4.21 

454 

Law expenses 

16,009,066 

9.88 

455 

Insurance 

156,475 

.10 

456 

Relief department expenses.. 

1,455,032 

.90 

457 

Pensions 

11,815,702 

729 

458 

Stationery and printing 

5,770,274 

3.56 

459 

Valuation expenses 

7,118,719 

4.39 

460 

Other expenses 

6,599,030 

4,07 

461 

General joint facilities — Dr. . 

1,630,794 

1.01 


General joint facilities — Cr. . 

--SOOjSSi 

a9 


Total general expenses . . 

$162,057,024 

100.00 


Total railway operating 
expenses 

$4,895,166,819 



It will be noted that the Purchasing Agent and General Store- 
keeper are not included in the list of general officers given in the 
classification under Account 451. The salaries and expenses of 
these officers and the expenses of their departments are included 
in Store Expense and charged to the cost of material as described 
on page 65. 

Taxes and Rents. — ^While we have now discussed all of the 
accounts included in r^way operating expenses, th»e are a lew 



Traffic and General Expenses, Taxes and Rents 135 

additional items to be considered in arriving at the total expenses 
to be deducted from railway operating revenues in arriving at the 
net railway operating income as described in Chapter III. These 
items are contained in the individual income accounts shown under 
the caption ‘Taxes and Rents” in the table on page 152 of the 
Appendix and will be discussed under the following headings : 

Railway tax accruals 
Uncollectible railway revenues 
Equipment rents 
Joint facility rents 

Railway Tax Accruals. — The taxes paid by a railroad are 
included in three income accounts, viz. : 

532, “Railway tax accruals” 

535, “Taxes on miscellaneous operating property” 

544, “Miscellaneous tax accruals” 

The first of these accounts — 532, “Railway tax accruals,” in- 
cludes taxes on the property of the company used in the service 
of transportation, the cost of which is included in the balance 
sheet account 701, “Investment in road and equipment,” and 702, 
“Improvements on leased railway property,” and also taxes on 
railway operations and privileges including federal income taxes. 

Taxes on operating property not used in the service of trans- 
portation, the cost of which is included in balance sheet Account 
705, “Miscellaneous physical property,” are charged to Account 
535, “Taxes on miscellaneous operating property”; taxes on the 
operations and privileges connected with this property, taxes on 
securities owned and the income therefrom and taxes on non- 
operating physical property, the cost of which is included in balance 
sheet account 705, “Miscellaneous physical property,” are charged 
to Account 544, “Miscellaneous tax accruals.” When, however, 
the proper separation of a tax between railway tax accruals and 
miscellaneous tax accruals cannot be made, the entire amount is 
charged to Account 532, “Railway tax accruals.” 

The relative importance of these three accounts is shown by 
the amounts included in each account by all Class 1 railroads in 
1923 as shown on page 136; 



136 Analysis of Railroad Operations 

532, ^‘RaOway tax accruals" $331,915,454 

535, 'Taxes on miscellaneous operating prop- 
erty" 178,015 

544, "Miscellaneous tax accruals" 4,827,589 

Railway taxes may be assessed on various bases, such as the 
valuation of the property, gross or net earnings, passengers car- 
ried, freight transported, length of line, equipment, etc., according 
to the laws of the various states and communities through which 
the railroad operates. Tax matters are usually in charge of a 
special department or a division of the legal department. 

Taxes are accrued on the basis of estimates, and fluctuations 
in the amounts included in this account sometimes are due to cor- 
rection of these estimates when the actual taxes are paid. The 
tax year does not in all cases correspond with the calendar year, 
so that adjustments of estimates in one period frequently apply 
to a previous period. 

In view of this situation there is no general measuring stick that 
can be used in analyzing fluctuations in taxes and the exact cause 
of the fluctuation has to be determined in each instance from the 
Accounting or Tax Department. 

Uncollectible Railway Revenues. — Income Account 533, 
"Uncollectible railway revenues," is a relatively small item, 
amounting to only 0.03 per cent of railway operating revenues of 
Class I railroads in 1923. This item represents amounts previously 
accrued in revenues which have been found to be uncollectible 
during the accounting period in question and therefore are charged 
off as a loss. The small proportion of the total revenues which 
cannot be collected is one of the favorable circumstances surround- 
ing the transportation business, and is due to the fact that transpor- 
tation is sold to a large extent on a cash basis. 

Equipment Rents. — The amounts received by a railroad com- 
pany for the use of its equipment by others and the amounts 
paid by it for the use of "foreign" equipment are recorded in the 
following income accounts. These rentals cover equipment leased 
or interchanged between operating railroad companies. In cases 
where one railroad leases outright the road and equipment of 
another railroad, the rental for the equipment as well as the 



Traffic and General Expenses, Taxes and Rents 137 

rental for the road is included by the lessee in Account S42, “Rent 
for leased roads.” 


Equipment Rents — Credits , 

503, “Hire of freight cars — credit balance” 

504, “Rent from locomotives” 

505, “Rent from passenger train cars” 

506, “Rent from floating equipment” 

507, “Rent from work equipment” 

Equipment Rents — Debits 

536, “Hire of freight cars — debit balance” 

537, “Rent for locomotives” 

538, “Rent for passenger train cars” 

539, “Rent for floating equipment” 

540, “Rent for work equipment” 

Hire of Freight Cars. — The most important of these equip- 
ment rental accounts on most railroads is “Hire of freight cars.” 
This is due to the fact mentioned in a previous chapter re- 
lating to freight car repairs, that the freight cars of the country 
are virtually handled in a pool and freely interchanged between 
the various railroads. As a result, practically all railroads have 
at all times a large number of foreign cars on their rails and a 
large number of their own cars on other railroads. This results 
in large credits and debits to “Hire of freight cars,” which ffo- 
quently are offsetting so that the net credit or debit balance in 
the account is small. In the case of “Hire of freight cars” for an 
individual railroad only the net balance in the account is reported, 
that is, if there is a net credit balance, this amount is reported 
on the income statement under Account 503, “Hire of freight 
cars — credit balance” ; if there is a net debit balance, the amount 
thereof is reported under Account 536, “Hire of frdght carsr— 
debit balance.” In the case of all other equifanent, the total 
credits and total debits are reported separately in tl% respective 
credit and debit equipment rent accounts. In the figures for. 
Qass 1 railroads given on page 152 of the Appendix, “Hite of 
frei^t cars— credit balance” represents the stun of tte net balances 
on those roads tetving a credit balance and “Hire of freight tars^ 



138 Analysis of Railroad Operations 

debit balance” represents the sum of the net balances on those 
roads having a debit balance. 

It was pointed out in the preceding paragraph that the net 
balance on '*Hire of freight cars” may be a small amount in spite 
of large credit and debit items. This does not mean that the 
account can be safely passed by without further analysis at least 
so far as the debit items are concerned. Freight cars interchanged 
between railroads are rented on the basis of a flat rate per day 
called per diem. This rate has been $1.00 per day since 1920. 
Consequently, any delay to foreign cars runs into money rapidly. 
The car days of foreign cars on the line should be compared with 
the miles run by those cars, so that any decrease in the miles per 
day will be noted. The transportation department frequently is 
tempted to hold cars for tonnage trains, thereby reducing trans- 
portation expenses. This saving may be more than offset by an 
increase in per diem and the matter should be given attention 
from both angles. 

In addition to foreign railroad cars which are interchanged on 
a per diem basis, a railroad usually handles large number of 
so-called "private line” cars, owned by various industries such 
as the packing houses, oil and chemical companies, etc., and used 
by these industries for the transportation of their products. These 
cars are rented to the railroads on a mileage basis, the car being 
returned direct to the owner or moved in accordance with his 
instructions when empty; mileage being charged for both the 
loaded and empty movement. 

While a railroad is not penalized for the slow movement of 
these cars as in the case of foreign railroad cars for which per 
diem instead of mileage is charged, the private car companies 
usually have inspectors traveling about the country to chedc up 
delays to their cars, particularly in connection with the return 
empty movement. The result is a comparatively high mileage 
per day for these cars. 

Joint Facility Rents. — The rental received by a railroad from 
other railroads which participate in the use of its facilities is in- 
cluded in Account 508, "Joint facility rent income.” The rental 
paid by a railroad for its participation in the joint use of facilities 
owned by others is included in Account 541, "Joint facility rents,” 



Traffic and General Expenses ^ Taxes and Rents 139 

Rentals received or paid by a railroad for the exclusive use of the 
facilities of another railroad are not included in the joint facility 
rent accounts but in Account 509, ‘^Income from lease of road,” 
or Account 542, *'Rent for leased roads,” as the case may be. 

The amount of the joint facility rents varies greatly on different 
railroads and depends upon whether the railroad in question is the 
owner of its terminal facilities or the joint user of terminal 
facilities owned by others. Fluctuations in these accounts do not, 
as a rule, have any particular relation to the fluctuations in traffic 
of the railroad except as they reflect increased or decreased use of 
the particular facilities to which the joint facility rents are ap- . 
plicable. Consequently, the analysis of these accounts must take 
the course of a detailed study of the rentals paid or received for 
the use of the individual facilities affected. 

In connection with the study of the relative amounts paid for 
equipment and joint facility rents by different railroads, it should 
be borne in mind that the cost of equipment and facilities used 
jointly is properly includable only in the property investment of 
the owning carrier. 

In the case of equipment facilities leased for long terms, the 
rental for which is included in Account 542, “Rent for leased 
roads,” the cost of this leased property is added to the cost of the 
property owned by the railroad in determining the relation be- 
tween the net railway operating income and the investment in 
property used on the service of transportation. 

Outside Income. — ^We have now covered all of the items of 
revenue and expense entering into net railway operating income, 
which, as we have seen, is the official measure of the net return 
from railroad operations available to pay interest on borrowed 
money, leases and other fixed charges and dividends. In addition 
to its net railway operating income a railroad has for this purpose 
such “Outside Income” as it derives from its investments in se- 
curities or from the operation of physical property not used in the 
service of transportation. It will be noted, however, by reference 
to the table on page 152 of the Appendix that the miscellaneous 
operating income from these operations not connected with trans- 
portation service is relatively small, amounting to only $358,905 
or 0.03 per cent of net railway operating income for all Class I 



140 Analysis of Railroad Operations 

railroads in 1923, On, the other hand the non-operating income 
amounted to $269,938,975 or 28 per cent of the net railway- 
operating income. 

This non-operating income varies greatly on different railroads. 
On some it is negligible,' while on others it is large enough to pay 
the fixed charges. In determining a railroad’s ability to meet 
these fixed charges, therefore, this other income must be taken 
into consideration and an analysis made of the sources thereof. 
The information for this study can be readily obtained from the 
accounting department. It is also contained in large measure in 
the annual reports made by the railroads to the Interstate Com- 
merce Commission and to the various State Commissions, which 
are unusually complete so far as the detail of the investments 
and sources of ‘‘outside income” of the railroad is concerned. 

Fixed Charges. — The principal items included in fixed charges 
are “Rent for leased roads” and “Interest on Funded Debt.” The 
table on page 153 of the Appendix shows that these two items in 
1923 amounted to $622,714,826 or 93 per cent of total fixed charges 
for Class I railroads. A description of these two items, as well as 
other items included in fixed charges, will be found on pages 312 
to 315 of the Appendix, 



CHAPTER XVII 


ANALYSIS OF RAILROAD OPERATIONS 
BASED ON DATA IN ANNUAL REPORT 
TO THE INTERSTATE COMMERCE COM- 
MISSION. 

In the foregoing chapters we have discussed the methods of 
analyzing railroad operations when all of the records kept by 
the various departments of the railroad were available to the 
analyst. Many students of railroad operations, however, are not 
so fortunate and have to depend for their information on the 
published reports of the railroads. It is, therefore, the purpose 
of this chapter to review briefly the methods of analyzing the 
revenues and expenses previously described and indicate to what 
extent these methods must be modified when the sources of in- 
formation are limited to the published reports of the carriers. 

All railroads engaged in interstate commerce come under the 
jurisdiction of the Interstate Commerce Commission and are 
required by law to make such reports as may be ordered by that 
Commission. These reports are made on forms prescribed by 
the Commission and are as a rule open to public inspection. In 
addition, the Annual Reports of Statistics of Common Carriers 
published by the Interstate Commerce Commission contain copies 
of the income and profit and loss statements and the balance sheets 
of the individual railroads together with the principal statistics 
contained in the individual annual reports to the Commission* 
These individual reports, however, contain supporting schedules 
giving important details which are not included in the annual 
statistical reports of the Commission. 

Next to the records of the railroads themselves the records of the 
Interstate Commerce Commission at Washington contain the 
greatest amount of detailed information with respect to the 
operation of any individual railroad. 

Annual Reports to the Interstate Commerce Commis^oh 
and to the Stockholders.~Beginning with 1916, the calendar 

lAx 



142 Analysis of Railroad Operations 

year has been the period covered by the annual reports to the Com- 
mission ; prior to that time the reports covered the twelve months 
ended June 30 of each year. The railroads also publish annual 
reports to the stockholders which are available to the public, but 
these reports vary greatly with respect to the amount of informa- 
tion contained and the manner in which it is presented and it is 
only in rare instances that they contain more complete statistics 
than are reported to the Commission. These annual reports to the 
stockholders are valuable to the analyst chiefly for the general 
explanations of fluctuations in revenues and expenses and the 
descriptions of the more important capital expenditures contained 
in the statement of the President or Chairman of the Board of 
Directors. 

The information reported by the railroads to the Interstate 
Commerce Commission for the monthly and cumulative periods 
of the year is not in sufficient detail to make a satisfactory analysis 
of the operating expenses, as the details by primary accounts 
are not available. A fairly satisfactory analysis, however, can be 
made of fluctuations in revenues. 

Let us now assume that a comparison of the operating results 
of a railroad for two years is desired and that our analyst is 
provided with copies of the annual report of this railroad to the 
Interstate Commerce Commission and to the stockholders for the 
two years under consideration and also has copies of other reports 
to the Commission as hereafter indicated. He is then in a position 
to undertake the comparison of the operations of the railroad for 
these two years in the manner hereafter described. 

The annual report to the Commission (hereafter called the 
Commission’s report for the sake of brevity) contains the income 
statement, profit and loss statement and balance sheet, together 
with numerous supporting schedules and statistics. A complete 
list of the various schedules contained in the Commission's report 
will be found on page 367 of the Appendix. A glance at this 
statement is suflScient to make one realize what a vast amount 
of information about a railroad is available from these reports. 

Let us, however, go through the various steps of the analysis 
and see to what extent the information contained in the Commis- 



Annual Report to LC.C. 143 

sion’s report is incomplete for the purpose of a detailed analysis 
of the revenues and expenses as described in previous chapters. 

Analysis of Fluctuations in Revenues. — ^The analysis of 
fluctuations in revenues as outlined in Chapters III, IV and V 
consisted chiefly of a study of the fluctuations in Accounts 101, 
“Freight,” and 102, “Passenger.” It was shown that fluctuations 
in these two accounts depended upon two factors, the quantity 
of service performed (ton miles or passenger miles) and the aver- 
age rate. All of the data used in the tables on pages 127 and 130 
can be found in the annual report to the Commission so that this 
general comparison can be made as readily in Washington as in 
the offices of the railroad. If, however, the analyst wishes to make 
a more detailed study of the movement and rates for different 
classes of traffic, he can only secure the necessary information 
from the detailed records of the traffic or accounting department 
of the railroad in question. 

Analysis of Fluctuations in Expenses. — The expenses of 
maintenance and operation constitute 95 per cent of railway 
operating expenses, so that the principal part of the analysis of 
fluctuations in expenses relates to these items. 

Maintenance of Way and Structures. — ^The first requisite 
for a detailed analysis of the cost of maintaining the fixed property 
is a division of the amounts included in each primary account 
between the following items; 

Labor 

Material 

Miscellaneous expense 

Depreciation 

Retirements 

The charges for depreciation are segregated in individual pri- 
mary accounts but the separation between the other items is not 
made in the reports of operating expenses to the Commission. 
Therefore, it is not possible to develop from these published 
reports the fluctuations in labor and material separately and the 
amount of these fluctuations due to changes in rates of pay and 
prices of material and to clmges in the hours worked and 
quantities of omterial applied. 



144 Analysis of Railroad Operations 

The importance of this part of the anal 3 rsis depends of course 
upon the extent of the fluctuations in rates of pay and prices of 
material between the two years in question. Equation factors 
for track labor can be developed from the report of employees 
service and compensation (Schedule 561) which can be applied 
to the track labor accounts, viz. : 

Account 202, “Roadway maintenance” 

Account 220, “Track laying and surfacing” 

Account 272, “Removing snow, ice and sand” 

Although work train expense, retirements and other miscdlane- 
ous items are included in the first two of these accounts, they do 
not ordinarily constitute a laige enough percentage of the account 
to distort the results obtained by the use of these labor equation 
factors. 

Information is also available from Schedules 513 and 515 in 
regard to the prices and quantities of ties and rail, so that a gen- 
eral idea can be obtained of the cause of fluctuations in the more 
important track accounts. The annual reports of the stockholders 
of some railroads also contain data relating to the application of 
other maintenance of way material such as ballast, lumber and 
other building material, fencing, bank widening, concrete work, etc. 

From these various sources estimates can be made of the relative 
amount of work done in each period as compared with the man 
hours of Maintenance of Way labor developed from the statement 
of employees and their compensation. 

Unit Costs. — The miles of track maintained divided between 
first main trade, additional main track and yard track and sidings 
can be developed from Schedule 411. The difference in use can be 
developed from the statistics on Schedule 531 and the monthly re- 
ports on Forms OSA and 03B. The unit cost per mile of track 
maintained can then be developed for each primary account. 

Costs per unit of work performed cannot be devdoped from 
the data contained in the Commission’s or Stockholders’ reports, 
chiefly because the distribution of the various accounts between 
labor, material and the other items of expense is not given. 

Steps in Analysis of Maintenance of Way and Structure^. 
— In view of this dtuation an analysis of maintenance of 



Annual Report to I.C.C, 145 

expenses made from the Commission or Stockholders’ reports 
must necessarily be confined to the following steps: 

1. Arrangement of the primary accounts into groups as shown 
on page 61, with a comparison of the individual accounts and 
groups in each period in order to locate the principal fluctuations. 

2. General analysis of the causes of fluctuations through a 
comparison of man hours and rates of pay for maintenance of 
way labor in each period and a comparison of the prices and 
quantities of ties, rails and other major materials applied. 

3. Development of unit costs per mile of equated track main- 
tained after allowance for difiEerence in use as outlined in 
Chapter IX. 

Maintenance of Equifanent. — ^The information necessary for 
a detailed analysis of maintenance of equipment expenses is also 
lacking. The situation is a little better than in the case of main- 
tenance of way and structures because charges for retirements 
are segregated in separate accounts and the equipment repair 
accounts represent labor, material and miscellaneous expenses only. 
On the other hand, while the man hours and rates of pay of flbe 
various classes of equipment repair labor are given on Schedule 
561, no information is available as to the value or quantities of 
material applied nor do the Commission reports have any infor- 
mation as to the number of classified repairs made to the ^flierent 
kinds of equi^Hnent. This information is somettmes reported in 
the Annual Reports to the stockholders, but not in very great 
detaiL 

The special difficulties in the way of analyzing Account 314, 
“Freight train cars — repairs,” were pointed out in Chapter XI and 
little can be done with this account. 

The condition of locomotives and freight cars, however, is 
reported mcmthly to the Interstate ^Commerce Commission on 
Form OSA, so that by comparing the condition of the equip- 
ment at the beginning and end of each period, and in the case of 
locomotives the miles run during each period, it is possible to get 
a general idea of the results obtained from the expenditures made 
ineadjp«iod. 

Steps in Analysis of Maintenance of ^nipment;----liie 
course foUoyred in the amdysis of maintenance of equiimient 



146 Analysis of Railroad Operations 

expenses is similar to that outlined above for maintenance of 
way and structures expenses, viz.: 

1. Arrangement of the primary accounts into groups in accord- 
ance with the table on page 84, with a comparison of the indi- 
vidual accounts and groups in each period in order to locate the 
principal fluctuations. 

2. A general analysis of the causes of fluctuations by a com- 
parison of the rates of pay and man hours of labor, the relative 
condition of equipment and the use made of the equipment as re- 
flected in the statistics of locomotive and car mileage. 

3. Development of unit costs for each class of equipment based 
on units maintained or service units as follows: 

Locomotives. — The proper service unit on which to base unit 
costs reflecting requirements for maintenance are the locomotive 
ton miles as outlined in Chapter XII, but these are only available 
for freight locomotives (Form OSA). On this account locomo- 
tive repair costs are usually based on the miles run, pounds of 
tractive power or locomotives owned. The locomotive miles can 
be obtained from the mileage statistics on Schedule 531. The 
locomotives owned and the pounds of tractive power are given 
on Schedule 417. 

Freight Cars. — ^The miles run on foreign lines by the cars 
owned by a railroad are not available and the cost per car mile, 
therefore, cannot be developed. The car miles on the home lines 
include both home and foreign cars. The cost per car owned is 
therefore the usual basis for unit costs. The capacity of the 
freight cars is sometimes used as a basis, but this does not appear 
to be as good a basis as the car owned. As explained in Chap- 
ter XII, the maintenance of the large capacity car may be less 
on account of stronger construction. 

Passenger Train Cars. The car miles for passenger train cars 
include the miles of foreign cars run in through service. On the 
other hand they do not include the miles of owned passenger cars 
on foreign lines. These two items are usually equalized so that 
the miles of passenger train cars reporte^i on Schedule 531, ex- 
cluding miles of sleeping cars, if these are operated by the Pullman 
Company, represent the service units of passenger train cars and 
the basis for unit costs. As a check on these costs p^ car mile 



Annual Report to LC.C. 147 

it is advisable to compute the cost per passenger car, as part of 
the maintenance cost is due to weather conditions and is not 
affected by the mileage of the car. 

Transportation Expenses. — The information on which to base 
an analysis of transportation expenses is much more complete 
in the Commission reports than in the case of maintenance ex- 
penses. This is due partly to the fact that in most cases labor, 
material and miscellaneous expenses are segregated in separate 
primary accounts so that the division between these three items 
of expense is available and partly to the fact that the statistics 
of train and engine performance in the monthly and annual reports 
to the Commission represent the units of work performed out of 
which the expenses of train and locomotive operation arise. 

It is possible, therefore, to make a reasonably complete analysis 
of the results of locomotive and train operation from the accounts 
and statistics as reported to the Commission in accordance with 
the methods outlined in Chapters XIII, XIV and XV. 

This analysis covers the average results for the entire road in 
which poor performance on one division may be oflFset by a good 
performance on another. The results by divisions of a railroad, 
however, are not reported to the Commission. 

The information as to the causes of fluctuations in the primary 
accounts included under the captions “Operation of Facilities” and 
“Supervision and Miscellaneous” is also not available from the 
records of the Commission and the analyst can only note the 
fact that there was an increase or decrease, as the case may be, in 
the cost of station service, loss and damage freight, etc. The 
specific causes for these fluctuations must be obtained from the 
records of the carriers. 

Steps in Analysis of Transportation Expenses,— The course 
to be followed in making an analysis of fluctuations in transpor- 
tation expenses from the information contained in the reports to 
the Commission is as follows : 

1 . A rearrangement of the primary accounts in accordance with 
the table on page 106 , with a comparison of the individual accounts 
and groups in each period in order to locate the principal fluc- 
tuations. ; 



148 Analysis of Railroad Operations 

2 . The comparison of the fluctuations in the expenses of loco- 
motive and train operation with fluctuations in the appropriate 
statistics of locomotive and train performance. 

3 . The development of unit costs of locomotive and train opera- 
tion, including a special analysis of fuel consumption. 

Analysis of Traffic and General Expenses, Taxes and 
Rents. — The analysis of fluctuations in traffic and general ex- 
penses and in taxes, equipment rents and joint facility rents con- 
sists chiefly in the comparison of the amounts included in the 
primary accounts of each period and the location of the general 
causes of the fluctuations. 

Some additional information is given in explanatory schedules 
supporting the amounts shown on the income statement for 
“Railway tax accruals’^ and “Hire of freight cars,^' but more 
specific information as to the causes of fluctuation can only be 
obtained from the records of the carriers. 



APPENDIX A 


Income Statement and Revenues and Expenses of Class 1 Railroads in 
1923 taken from the preliminary abstract of statistics of Class I carriers 
for the year ended December 31, 1923, issued by the Interstate Omeattct 
Commission, 


List of Tables, 

Table 1.— Income Statement as reported by the Interstate Commerce 
Commission. 

Table 2.— Income Statement rearranged to show accounts induded hi 
Net Railway Operating Income. 

Table 3. — Railway operating revenues by primary accounts. 

Table 4. — Railway operating expenses oy primary accounts. 

Table 5. — Maintenance of Way and Structures— rearrangement of primary 
accounts in accordance with the cause and character of the 
expense. 

Table 6.— Maintenance of Equipment— rearrangement of primary accounts 
in accordance with the cause and character of the expense. 

Table 7. — Transportation— Rail Line— rearrangement of primary accounts 
in accordance with the cause and character of the expense. 



Analysis of Railroad Operations 


150 


TABLE I— INCOME STATEMENT 
As Reported by the Interstate Commerce Commission 
Class I Railroads, Excluding Switching and Terminal Compames 
Calendar Year 1923. 

Income 

Account 

Number Name of Account Amount 

SOI Railway operating revenues $6,289,580,027 

531 Railway operating expenses 4,895,166,819 


— ^A Net revenue from railway operations 1,394,413,208 

532 Railway tax accruals 331,915,459 

533 Uncollectible railway revenues 1,941,658 


-B Railway operating income 1,060,556,091 


502 Revenues from miscellaneous operations 4,069,024 

534 Expenses of miscellaneous operations 3,532,104 


— C Net revenue from miscellaneous operations .... 536,920 

535 Taxes on miscellaneous operating property 178,015 


-D Miscellaneous operating income 358,905 


— Total operating income 1,060,914,996 


503 Hire of freight cars-— credit balance 30,687,184. 

504 Rent from locomotives 12,203,519 

505 Rent from passenger-train cars 15,001,310 

506 Rent from floating equipment 360,800 

507 Rent from work equipment 2,598,353 

508 Joint facility rent income 33,933,954 

509 Income from lease of road 7,723,099 

510 Miscellaneous rent income 18,544,873 

511 Miscellaneous nonoperating physical property 7,431,545 

512 Separately operated properties— profit 2,519,986 

513 Dividend income 129,899,789 

514 Income from funded securities 63,456,230 

515 Income from unfunded securities and accounts 30,994,921 

516 Income from sinking and other reserve funds 3,542,568 

517 Release of premiums on funded debt 108,980 

518 Contributions from other companies 5,068,261 

519 Miscellaneous income 648,723 


— F Total nonoperating income 364,724,095 


■G Gross income $1,425,639^091 



Appendix A 


Income 

Account Name of Account 

Number 

536 Hire of freight cars— debit balance 

537 Rent for locomotives 

538 Rent for passenger-train cars 

539 Rent for floating equipment 

540 Rent for work equipment 

541 Joint facility rents 

542 Rent for leased roads 

543 Miscellaneous rents 

544 Miscellaneous tax accruals 

545 Separately operated properties — loss . . . 

546 Interest on funded debt 

547 Interest on unfunded debt 

548 Amortization of discount on funded debt 

549 Maintenance of investment organization 

550 Income transferred to other companies . 

551 Miscellaneous income charges 


151 


Amount 


$100,700,165 

12,272,536 

16,863,841 

3,264,231 

1,634.901 

58,650,081 

151.660,285 

6.894,186 

4,827,589 

4,264,677 

471,054.541 

14,926,168 

3,332,431 

32,398 

3,269,807 

7,353,547 


— H Total deductions from gross income $61,001,384 

— Net income $564,637,707 



152 Analysis of Railroad Operations 

TABLE 2— INCOME STATEMENT 

Rearranged to Show Accounts Included in Net Railway 
Operating Income 

Class I Railroads, Excluding Switching and Terminal Companies 
Calendar Year 1923. 


Income 

Account 

Number Name of Account Amount 

501 Railway operating revenues $6)289,580,027 

531 Railway operating expenses 4,895,166,819 

— A Net revenue from railway operation $1,394,413,208 

532 Railway tax accruals 331,915,459 

533 Uncollectible railway revenues 1,941,658 

— Railway operating income 1,060,556,091 

Equipment rents---credits 

503 Hire of freight cars— credit balance.. 30,687,184 

504 Rent from locomotives 12,203,519 

505 Rent from passenger trainxars 15,001,310 

506 Rent from floating equipment 360,800 

507 Rent from work equipment 2,598,353 

— Total equipment rents— credits .... 60,851,166 

Equipment rmtS’^debits 

536 Hire of freight cars— debit balance .... 100,700,165 

537 Rent for locomotives 12,272,536 

538 Rent for passenger train cars 16,863,841 

539 Rent for floating equipment 3,264,231 

540 Rent for work equipment 1,634,901 

— K Total equipment rent— debits 134,735,674 

— L Equipment rents (net debit or credit) 73,884,508 

508 Joint facility rent income 33,933,954 

541 Joint facility rents 58,650,081 

— Joint facility rents 

(net debit or credit) 24,716,127 

— N Net railway operating income . . 961,955,456 

Miscellaneous Operations 

502 Revenues from miscellaneous operations 4,069,024 

534 Expenses of miscellaneous operations.. 3,532,104 

-^C Net revenue from miscellaneous 

operations 536,920 

535 Taxes on miscellaneous operating 

property 178,015 

— D Miscellaneous operating income. .. . 358,^5; 





Appendix A 


IS3 


Income 

Account 

Number Name of Account Amount 

Non-Operating Income 

509 Income from lease of road $ 7,723,099 

510 Miscellaneous rent income "" 18,544,873 

511 Miscellaneous non-operating physical 

property 7,431,545 

512 Separately operated properties — ^profit.. 2,519,986 

513 Dividend income 129,899,789 

514 Income from funded securities 63,456,230 

515 Income from unfunded securities and 

accounts 30,994,921 

516 Income from sinking and other reserve 

funds 3,542,568 

517 Release of premiums on funded debt. 108,980 

518 Contributions from other companies.. 5,068,261 

519 Miscellaneous income 648,723 

— O Total Non-Operating Income .... 269,938,975 


— P Gross Income 1,232,253,336 


Fixed Charges 

542 Rent for leased roads 151,660,285 

543 Miscellaneous rents 6,894,186 

544 Miscellaneous tax accruals 4,827,589 

545 Separately operated properties — ^loss... 4,264,677 

546 Interest on funded debt 471,054,541 

547 Interest on unfunded debt 14,926,168 

548 Amortization of discount on funded debt 3,332,431 

549 Maintenance of investment organization 32,398 

550 Income transferred to other companies 3,269,807 

551 Miscellaneous income charges ........ 7,353,547 

— Q Total fixed charges 667,615,629 

— 'X Net income $564,637,707 



154 Analysis of Railroad Operations 

TABLE 3— RAILWAY OPERATING REVENUES BY 
PRIMARY ACCOUNTS 

Class 1 Railroads, Excluding Switching and Terminal Compames 
Calendar Year 1923. 


Operating 

Revenue 

Account 

Number Name of Account Amount 

101 Freight $4,606,719,288 

102 Passenger 1,145,698,579 

103 Excess baggage 8,690,500 

104 Sleeping car 2,623,415 

105 Parlor and chair car 1,354,470 

106 Mail 92,896.555 

107 Express 152,885,162 

108 Other passenger-train 13,637,536 

109 Milk 34,109,221 

no Switching 62,277,590 

111 Special service train 2,384,443 

112 Other freight-train 883,149 

113 Water transfers — freight 1,104,803 

114 Water transfers—passenger 2,262,963 

115 Water transfers— vehicles and live stock 5,818,737 

116 Water transfers — other 1,329,656 

—A Total rail-line transportation revenue 6,134,676,067 

121 Freight 15,644,797 

122 Passenger 1,890,305 

123 Excess baggage 5,2lS 

124 Other passenger service 20,870 

125 Mail 23,741 

126 Express 25,378 

127 Special service 31,412 

128 Other 514,871 

— B Total water-line transportation revenue 18,156,589 

131 Dining and buffet 29,780,193 

132 Hotel and restaurant 11,333,487 

133 Station, train, and boat privileges 6,256,328 , 

134 Parcel room 1,661,635 

135 Storage-freight 5,339,916 

136 Storage-baggage 1,004,515 

137 Demurrage 27,753,122 

138 Telegraph and telephone 2,401,832 , 

139 Grain elevator 1,594,929 

140 Stockyard 582,680 

141 Power 5,853,686 

142 Rents of buildings and other property 6,663,335 

143 Miscdlaneous 28,7^,807 

— Total incidental operating revenue $.128,966,465 




Appendix A 


155 


Operating 

Revenue 

Account 

Number Name of Account Amount 

151 Joint facility — Cr $10,135»970 

152 Joint facility— Dr 2,S55fi6i 

— D Total joint facility operating revenue 7,780.906 

— Total railway operating revenues 6,289,580,027 

[Income Account No. 501] . 



Andysis of Railroad Operations 


156 


TABLE 4— RAILWAY OPERATING EXPENSES BY 
PRIMARY ACCOUNTS 

Class I Railroads, Excluding Switching and Terminal Companies 
Calendar Year 1923, 


Operating 

Expense 

Account 

Number Name of Account Amount 


L Maintenance of Way and Structures 

201 Superintendence 

202 Roadway maintenance 

203 Roadway-depreciation 

204 Underground power tubes 

205 Underground power tubes — depreciation 

206 Tunnels and subways 

207 Tunnels and subways — depreciation 

208 Bridges, trestles, and culverts 

209 Bridges, trestles, and culverts— depreciation 

210 Elevated structures 

211 Elevated structures— depreciation 

212 Ties 

213 Ties— depreciation 

214 Rails 

215 Rails — depreciation 

216 Other track material 

217 Other track material— depreciation 

218 Ballast 

219 Ballast— depreciation 

220 Track laying and surfacing 

221 Right-of-way fences 

222 Right-of-way fences — depreciation 

223 Snow and sand fences and snowsheds 

224 Snow and sand fences and snowsheds — depreciation 

225 Crossings and signs 

226 Crossings and signs — depreciation 

227 Station and office buildings 

228 Station and office buildings — depreciation 

229 Roadway buildings 

230 Roadway buildings— depreciation 

231 Water stations 

232 Water stations— depreciation 

233 Fuel stations 

234 Fuel stations— depreciation 

235 Shops and enginehouses 

236 Shops and enginehouses— depredation 

237 Grain elevators 

238 Grain elevators — depreciation 

239 Storage warehouses 


$ 52,540,613 
85,124,116 
140,039 


1,944,911 

11,344 

43,557,108 

1,253,379 

365,034 


116,240,452 
2,140,300 
34,514,256 
730,768 
40,649,240 
787,033 
18,250,466 
269,535 
209,605,688- 
6,231,525 
2,933 
754,220 
— 8I4 
12,533,767 
37,728 
33,109,537 
648,256 
4,967,502 
49,541 
11,588,935 
94,517 
5,614,854 
53,790 
25,630,597 
298,903 
1,220,883 
4,089 
113.558 



Appendix A 


Operating 

Expense 

Accotmt 

N umber Name of Account 

240 Storage warehouses — depreciation 

241 Wharves and docks 

242 Wharves and docks — depreciation 

243 Coal and ore wharves 

244 Coal and ore wharves — depreciation 

245 Gas producing plants 

246 Gas producing plants— depreciation 

247 Telegraph and telephone lines 

248 Telegraph and telephone lines — depreciation 

249 Signals and interlockers 

250 Signals and interlockers — depreciation 

251 Power plant dams, canals, and pipe lines 

252 Power plant dams, canals, and pipe lines — depreciation 

253 Power plant buildings * 

254 Power plant buildings— depreciation 

255 Power substation buildings 

256 Power substation buildings— depreciation 

257 Power transmission systems 

258 Power transmission systems — depreciation 

259 Power distribution systems 

260 Power distribution systems— depreciation 

261 Power line poles and fixtures 

262 Power line poles and fixtures — depreciation 

263 Underground conduits 

264 Underground conduits — depreciation 

265 Miscellaneous structures 

266 Miscellaneous structures — depreciation 

267 Paving 

268 Paving— depreciation 

269 Roadway machines 

270 Roadway machines — depreciation 

271 Small tools and supplies 

272 Removing snow, ice, and sand 

273 Assessments for public improvements 

274 Injuries to persons 

275 Insurance 

276 Stationery and printing 

277 Other expenses 


157 


Amount 

$ 2,456 

5,287,439 
123,822 
2,930,918 
822,337 
75,298 


10,832,222 

8,601 

26,037,386 

145,566 

12,373 

” 657 ,^ 

173,372 

27,723 

19,074 

219,876 

78 , 5 ^ 

2,499,390 

322,535 

413,702 

96,875 

12,212 

9,092 

466,782 

29,422 

529,184 

122 

6,158,319 

11,583 

11,143,440 

11,209,320 

623,160 

4,721,689 

4,510,801 

1,464,005 

844,048 


— Total, above accounts . 803,598,961 

278 Maintaining joint tracks, yards, & other facilities— Dr. 34j3%p38 

279 Maintaining joint tracks, yards, & other facilities— Cr. 

280 Equalization— way and structures— Dr 463,174 

— Total maintenance of way and structures $813,688,760 



158 Analysis of Railroad Operations 


Operating 

Expense II. Maintenance of Equipment 

Account 

Number Name of Account Amount 

301 Superintendence $ 43^273,018 

302 Shop machinery 27,949,812 

303 Shop machinery — depreciation 347,009 

304 Power plant machinery 5,704,734 

305 Power plant machinery — depreciation 566,221 

306 Power substation apparatus 303,815 

307 Power substation apparatus— depreciation 88,886 

308 Steam locomotives— repairs 559,283,295 

309 Steam locomotives — depreciation 44,990,794 

310 Steam locomotives — retirements 6,266,469 

311 Other locomotives— repairs 2,862,465 

312 Other locomotives — depreciation 633,585 

313 Other locomotives — retirements 786 

2il4 Freight-train cars — repairs 475,433,689 

315 Freight-train cars — depreciation 91,635,425 

316 Freight-train cars — retirements 29,322,494 

317 Passenger-train cars — repairs 91,550,882 

318 Passenger-train cars— “depreciation 12,661,693 

319 Passenger-train cars — retirements 951,381 

320 Motor equipment of cars — repairs 1,846,513 

321 Motor equipment of cars — depreciation 458,950 

322 Motor equipment of cars — retirements 14,188 

323 Floating equipment— repairs 13,975,965 

324 Floating equipment — depreciation 2,536,594 

325 Floating equipment— retirements 471,359 

326 Work equipment — repairs 22,370,518 

327 Work equipment— depreciation 3,856,721 

328 Work equipment— retirements 1,749,925 

329 Miscellaneous equipment— repairs 266,709 

330 Miscellaneous equipment— depreciation 105,298 

331 Miscellaneous equipment — retirements 44,530 

332 Injuries to persons 5,889,458 

333 Insurance 6,975,494 

334 Stationery and printing 2,700,828 

335 Other expenses 5,132,664 


Total 1,462,222,167 


336 Maintaining joint equipment at terminals — Dr 

337 Maintaining joint equipment at terminals — Cr 

338 Equalization— equipment— Cr 

— Total maintenance of equipment 

III. TraMc 

351 Superintendence 

352 Outside agencies 

353 Advertising 

354 Traffic associations 

355 Fast freight lines 

356 Industrial and immigration bureaus 

357 Insurance 

358 Stationery and printing . ... . , . , , . . . . . . 

.359 ; Other expenses 


6,475,771 


1,465,156,595 


31,407,633 
37,187,241 
10,158,749 
. 2,248,593 

54,700 
1,918^777 
28,211 
10,857373 
: 114 ^ 



159 


Appendix A 

Operating 

Expense IV, Transportationr^Rail Line 

Account 

Number Name of Account 

371 Superintendence 

372 Dispatching trains 

373 Station employees 

374 Weighing, inspection, and demurrage bureaus 

375 Coal and ore wharves 

376 Station supplies and expenses 

377 Yardmasters and yard clerks 

378 Yard conductors and brakemen 

379 Yard switch and signal tenders 

380 Yard enginemen 

381 Yard motormen 

382 Fuel for yard locomotives 

383 Yard switching power produced 

384 Yard switching power purchased 

385 Water for yard locomotives 

386 Lubricants for yard locomotives 

387 Other supplies for yard locomotives 

388 Enginehouse expenses — ^yard 

389 Yard supplies and expenses 

392 Train enginemen 

393 Train motormen 

394 Fuel for train locomotives 

395 Train power produced 

396 Train power purchased 

397 Water for train locomotives 

398 Lubricants for train locomotives 

399 Other supplies for train locomotives 

400 Enginehouse expenses — strain 

401 Trainmen 

402 Train supplies and expenses 

403 Operating sleeping cars 

404 Signal and interlocker operation 

405 Crossing protection — 

406 Drawbridge operation 

407 Telegraph and telephone operation 

408 Operating floating equipment 

409 Express service 

410 Stationery and printing 

411 Other expenses 

414 Insurance 

415 Clearing wrecks 

416 Damage to property 

417 Damage to live stock on right of way 

418 Loss and damage-freight 

419 Loss and damage— baggage 

420 Injuries to persons , 

390 Operating joint yards and terminals— Dr 

391 Operating joint yards and terminjds— Cr 

412 Operating joint tracks and facilities— Dr 

413 Operating joint tracks and facilities — Cr 

— Total transportation— Rail line .......... 


Amount 

67,168,126 

34,829,016 

314,440,211 

5,023,013 

10,084,059 

22,175,539 

61,308,261 

145,581,755 

12,071,385 

87,788,721 

672,460 

86,326,610 

293,113 

101,842 

4,792,256 

1,446,059 

1,698,198 

33,987,421 

3,840,238 

236,073,884 

3,103,200 

442,892,626 

3,070,338 

4,711,875 

23,245,847 

7,920,563 

8,106,161 

95,508,872 

271,376,454 

77,867,773 

1,032,888 

25,454,221 

21,340,703 

2,122,157 

10,689,702 

27,789,711 


15,923.060 

4,004,343 

13.461,697 

11,419.872 

5,662,988 

3,544,459 

36,265,465 

472,173 

29,924,030 

63,942,839 

S2JS$$,280 

15,712.668 

iS,m.806 



i6o 

Analysis of Railroad Operations 


Operating 

IBxpense 

Account 

Number 

V. Transportafionr^PVater Line 


Name of Account 

Atnoun 

431 Operation of vessels 

432 Operation of terminals 

433 Incidental 

$ 6,068/ 
5,166,! 
439; 


Total transportation— Water line 11, 674, ^ 


441 

442 

443 

444 

445 

446 


VI. Miscellaneous Operations 

Dining and bufifet service 

Hotels and restaurants 

Grain elevators 

Stock yards 

Producing power sold 

Other miscellaneous operations 


33,415,: 

10,531,5 

1,398, 

446,3 

3,277,( 

1,578,; 


Total miscellaneous operations 


50, 647, ( 


451 

452 

453 

454 

455 

456 

457 

458 

459 

460 

461 

462 


VIIL 


VII. General 

Salaries and expenses of general officers 

Salaries and expenses of clerks and attendants 

General office supplies and expenses 

Law expenses 

Insurance 

Relief department expenses 

Pensions ; «... 

Stationery .and printing 

Valuation expenses 

Other expenses 

General joint facilities — Dr. 

General joint facilities — Cr 


17,120,^ 
87,860,; 
6 fi 2 U 
16,009,( 
156,^ 
, 1,455,C 
11,815,5 

5.770.5 

7.118.5 
6,599,( 

1.630.5 

BOOJL 


Total general expenses 162,057, ( 

Transportation for Investment — Cr. 


Total railway operating expenses 

Ratio of operating expenses to operating revenues.. 


4,895, 166jf 


Separation Between Services 

Related solely to freight service 2,443,011,1 

Related solely to passenger and allied services 792,537, ^ 

Related in common to both freight and passenger 

Apportioned to freight service 1,223,242,5 

Apportioned to passenger and allied services. . . . 430,285,5 

Not related to either freight service or to passenger 

services 6,090,5 


Total 


$ 4 , 895 , 1 ^ 



Appendix A i6i 


TABLE 5— MAINTENANCE OF WAY AND STRUC- 
TURES EXPENSES 


Rearbangement of Primary Accounts in Accordance with 
THE Cause and Character of the Expense 


Class I Railroads, Excluding Switching and Terminal Companies 
Calendar Year 1923. 


Primary 

Account 

Number Name of Account Amount 

Repaibs 
Track Material 

212 Ties $ 116,240,452 

214 Rails 54,514,256 

216 Other track material 40,649,240 

218 Ballast 18,250.466 

Total track material 209,654,414 

220 Track laying and surfacing 209,605,^ 


Roadway Maintenance 

202 Roadway maintenance 85,124,116 

272 Removing snow, ice, and sand 11,209,320 

221 Right of way fences 6,231,525 

223 Snow and sand fences and snowsheds.. 754,220 

225 Crossings and signs 12,533,767 

267 Paving 529,184 

269 Roadway machines 6,158,319 

271 Small tools and supplies 11,143,440 

Total roadway maintenance.. ..... 133,683,891 


Tunnels, Bridges and Elevated Structures 

206 Tunnels and subways 1,944,911 

208 Bridges, trestles and culverts 43,557,108 

210 Elevated structures 365,034 

Total tunnels, bridges and elevated ^ ^ 

structures 



i 62 


Analysis of Railroad Operations 
Primary Buildings and Other Structures 


Account 

Number Name of Account Amount 

227 Station and office buildings $33,109,537 

229 Roadway buildings 4,967,502 

231 Water stations 11,588,935 

233 Fuel stations 5,614,854 

235 Shops and enginehouses 25,630,597 

237 Grain elevators 1,220,883 

239 Storage warehouses 113,558 

241 Wharves and docks 5,287,439 

243 Coal and ore wharves 2,930,918 

265 Miscellaneous structures 466,782 

Total building and other structures $90,931,005 

Signals 

247 Telegraph and telephone lines 10,832,222 

249 Signals and interlockers 26,037,386 

Total signals 36,869,<5Ub 

Power Plants and Transmission Systems 

245 Gas producing plants 75,298 

251 Power plants, dams, canals and pipe lines 12,373 

253 Power plant buildings 657,622 

255 Power substation buildings 27,723 

257 Power transmission systems 219,876 

259 Power distribution systems 2,499,390 

261 Power line poles and fixtures 413,702 

204 Underground power tubes 

263 Underground conduits 12,212 

Total power plants and transmis- 
sion systems 3,918,196 

Total repairs $ 730,529,855 

Depseciation 
Track Material 

213 Ties— depreciation $ 2,140,300 

215 Rails — depreciation 730,768 

217 Other track material— depreciation 787,033 

219 Ballast— depreciation 269,535 

Total track material — depreciation. $ 3,927,636 

203 Roadway— depreciation 140,039 

222 Right-of-way fences — depreciation ... 2,933 

224 Snow and sand fences and snowsheds — 

depreciation — 8 I 4 

226 Crossings and signs— depreciation 37,728 

268 Paving— depreciation 122 

270 Roadway machines — depreciation 11,583 


Total roadway and track— deprecia- 
tion $ 191,591 



Appendix A 


Primary 

Account 

N umber N ame of Account 

Tunnels, Bridges and Elevated Structures 


207 Tunnels and subways — depreciation . . . 11,344 

209 Bridges, trestles and culverts — deprecia- 
tion 1,253,379 

211 Elevated structures — depreciation 


Total tunnels, bridges and elevated 
structures — depreciation 

Buildings and Other Structures 

228 Station and office buildings — depreciation 648,256 

230 Roadway buildings — depreciation 49,541 

232 Water stations — ^depreciation 94,517 

234 Fuel stations— depreciation 53,7^ 

236 Shops and enginehouses — depreciation. 298,903 

238 Grain elevators — depreciation 4,089 

240 Storage warehouses— depreciation 2,456 

242 Wharves and docks— depreciation .... 123,822 

244 Coal and ore wharves— depreciation. . . 822,337 

266 Miscellaneous structures— depreciation. 29,422 


Total buildings and other structures 
— depreciation 

Signals 

248 Telegraph and telephone lines — depre- 
ciation 8,601 

250 Signals and interlockers— depreciation. 145,566 


Total signals— depreciation 

Power Plants and Transmission Systems 


246 Gas producing plants — depreciation ... 

252 Power plant dams, canals and pipe lines 

— depreciation 

254 Power plant buildings — depreciation... 173,372 

256 Power substation buildings— deprecia- 
tion 19,074 

258 Power transmission systems— deprecia- 
tion 78,592 

260 Power distribution systems — deprecia- 
tion 322,535 

262 Power line poles and fixtures— deprecia- 
tion 96,875 

205 Underground power tubes — depreciation 

264 Underground conduits— depreciation .. 9,092 


sion systems— depreciation ... 


Total d^reciation $ 


163 

Amoimt 


1 ^ 64^23 


2,127,133 


154,167 


699,540 

0,364,790 



164 Analysis of Railroad Operations 

Supervision and Miscellaneous 

Primary 

Account 

Number Name of Account Amount 

201 Superintendence $ 52,540,613 

273 Assessments for public improvements. 623,160 

274 Injuries to persons 4,721,689 

275 Insurance 4,510,801 

276 Stationery and printing 1,464,005 

277 Other expenses i 844,048 

280 Equalization— -way and structures— Dr. 463,174 


Total superintendence and miscel- 
laneous $ 65,167,490 

Joint Facilities 

278 Maintaining joint tracks, yards and 

other facilities — Dr 34,390,038 

279 Maintaining joint tracks, yards and 

other facilities— Cr 24JT6S^1S 


Joint facilities, net total 9,626,625 


Total maintenance of way and 

structures $ 813,688,760 



Appendix A 


165 


TABLE 6— MAINTENANCE OF EQUIPMENT 
EXPENSES 

Rearrangement of Primary Accounts in Accordani^ with 
THE Cause and Character of the Expense 

Class I Railroads, Excluding Switchmg and Terminal Companies 

Calendar Year 1923. 


Number Primary Account Amount 

Equipment Repairs 

308 Steam locomotives— repairs $ 559,283,29$ 

311 Other locomotives— repairs 2,862,465 

Total locomotive repairs..,.. $ 562,145,760 

314 Freight-train cars— repairs ’ 475,4^,6^ 

317 Passenger-train cars— repairs 91,550,^ 

Other Equipment 

320 Motor equipment of cars— repairs .... 1,846,513 

323 Floating equipment— repairs 13,975,965 

326 Work equipment— repairs 22,370,518 

329 Miscellaneous equipment— repairs .... 266,709 

Total other equipment repairs..., 38,459,705 

Total equipment repairs 1,167,590,036 

Equipment Depreciation 

309 Steam locomotives — depreciation ..... 44,990,794 

312 Other locomotives— depreciation ...... 633,585 

315 Freight-train cars— depreciation 91,635,425 

318 Passenger-train cars — depreciation .... 12,661,693 

321 Motor equipment of cars— depreciation 458,950 

324 Floating equipment— depreciation 2,536,594 

327 Work equipment— depreciation 3,856,721 

330 Miscellaneous equipment— depreciation. 105,298 

Total equipment— depreciation 156,879,060 


Equipment Retirements 

310 Steam locomotives— retirements 6,266,469 

313 Other locomotives— retirements 786 

316 Freight-train cars— retirements 29,322,494 

319 Passenger-train cars— retirements .... 951,381 

3^ Motor equipment of cars— retirements. 14,188 

^5 Floating equipment— retirements 471,359 

328 Work equipment— retirements 1,749,925 

331 Miscellaneous equipment— retirements. 44,530 

Total equipment letiretnents $ 38,821,132 



i66 Analysis of Railroad Operations 

Number Primary Account 

Shop and Power Plant Machinery Repairs 

302 Shop machinery $ 27,949,812 

304 Power plant machinery 5,704,734 

306 Power substation apparatus 303,815 


Total shop and power plant ma- 
chinery repairs 

Shop and Power Plant Machinery Depreciation 


303 Shop machinery—depreciation 347,009 

305 Power plant machinery— depreciation. 566,221 

307 Power substation apparatus— deprecia- 
tion 88,886 


Total shop and power plant ma- 
chinery depreciation 

Supervision and Miscellaneous 


301 Superintendence 43,273,018 

332 Injuries to persons 5,889,458 

333 Insurance 6,975,494 

334 Stationery and printing 2,700,828 

335 Other expenses 5,132,664 

338 Equalization-Equipment— Cr i69J967 


Total supervision and miscellaneous 


Joint Facility Accounts 

336 Maintaining joint equipment at 

terminals — Dr 6,475,771 

337 Maintaining joint equipment at 

terminals — Cr 3fl71JS76 


Total joint facility accounts 

Total maintenance of equipment,.. 


Amount 


33,958,361 


1,002,116 


63,501,495 


3,404,395 

$1,465,156,595 



Appendix A 167 

TABLE 7— TRANSPORTATION EXPENSES— RAIL 

LINE 

Rearrangement of Primary Accounts in Accordance with 
THE Cause and Character of the Expense 

Class 1 Railroads, Excluding Switching and Terminal Companies 


Calendar Year 1923, 

Primary 

Account 

Number Name of Account Amount 

Train and Locomotive Operation 
Train Operation 

400 Enginehouse expenses— train $ 95,508,872 

392 Train enginemen 236,073,884 

393 Train motormen 3,103,200 

394 Fuel for train locomotives 442,8^^626 

395 Train power produced 3,070,338 

396 Train power purchased 4^11 >875 

397 Water for train locomotives 23,245,847 

398 Lubricants for train locomotives 7,920,563 

399 Other supplies for train locomotives .. 8,106,161 

401 Trainmen 271,376,454 

402 Train supplies and expenses 77,867,773 


— A Total train operation $1,173,877,593 

Yard Locomotive Operation 

388 Enginehouse expenses— yard 33,987,421 

380 Yard enginemen 87,788,721 

381 Yard motormen 672,460 

382 Fuel for yard locomotives 86,326,610 

383 Yard switching power produced 293,113 

384 Yard switching power purchased 101,842 

385 Water for yard locomotives 4,792,256 

386 . Lubricants for yard locomotives ..... 1,446,059 

387 Other supplies in yard locomotives ... 1,698,198 

378 Yard conductors and brakemen 145,581,755 


•B Total yard locomotive operation... 362,688,435 


— C Total train and locomotive opera- 
tion $1,536,566,028 

Operation of Stations and Other Facilities 

Station Service 


374 Weighing, inspection and demurrage 

bureius 5,023,013 

375 Coal and ore wharves 10,084,059 

376 Station supplies and expenses 22,175,539 


— Total station service $ 351,722,822 



i68 Analysis of Railroad Operations 

Primary Signals and Crossing Protection 

Account 

Number Name of Account Amount 

379 Yard switch and signal tenders $ 12,071,385 

404 Signal and interlocker operation 25,454,221 

405 Crossing protection 21,340,703 

406 Drawbridge operation 2,122,157 

407 Telegraph and telephone operatives . . . 10,689,702 


— F Total signals and crossing protection $ 71,678,168 

408 Operating floating equipment 27,789,711 

403 Operating sleeping cars 1,032,888 


Total operation of stations and 

other facilities 452,223,589 

Supervision and Miscellaneous 
Supervision 

371 Superintendence 67,168,126 

372 Dispatching trains 34,829,016 

377 Yard masters and yard clerks 61,308,261 

389 Yard supplies and expenses 3,840,238 


— G Total supervision 167,145,641 

Casualties 

415 Gearing wrecks 11,419,872 

416 Damage to property 5,662,988 

417 Damage to live stock on right of way, . 3,544,459 

418 Loss and damage — freight 36,265,465 

419 Loss and damage— baggage 472,173 

420 Injuries to persons 29,924,030 


— Total casualties 87^88,987 

Miscellaneous 

409 Express service 

410 Stationery and printing 15,923,060 

411 Other expenses 4,004,343 

414 Insurance 13,461,697 


— ^I Total miscellaneous 33,389,100 


— Total supervision and miscellaneous 287,823,728 

Joint Facilities 

390 Operating joint yards and terminals— Dr, 63,942,839 

391 Operating joint yards and terminals— Cr, 32,838,280 

412 Operating joint tracks and facilities — 

Dr 15,712,668 

413 Operating joint tracks and facilities— 

Cr 18,826,806 


-K Joint facilities— net total 32,995,421 


— K Total transportation expenses— rail 

line $2;309Wa 



APPENDIX B 


CLASSIFICATION 

OF 

OPERATING REVENUES AND 
OPERATING EXPENSES 

OF 

STEAM ROADS 

PltESCRIBED BY TBB 

INTERSTATE COMMERCE COMMISSION 

IK ACCORDANCE WITH SECTION 20 OF THE 
ACT TO SEGX7LATE COMMERCE 


ISSUE OF 1914 


Effective on t, ip 14 
With Supplements 



170 Analysis of Railroad Operations 

CONTENTS. 


Page 


Order of the Commission 170 

Introductory letter 172 

General instructions : 

1. Operating accounts 173 

2. Unaudited items affecting operating accounts 174 

3. Delayed items 174 

4. Miscellaneous operations 174 

5. Submission of questions 174 

Operating revenue accounts 

Special instructions 175 

Text for operating revenue accounts 176 

Operating expense accounts 

General accounts 190 

Special instructions 190 

Text for operating expense accounts 201 

Supplements : 

Order of June 2, 1924 — Recapture 286 

Order of June 2, 1924 — Equalization of expenses 288 


ORDER. 

At a General Session of the INTERSTATE COMMERCE COMMIS- 
SION, held at its office in Washington, D. C., on the 19th day of 

May, 1914. 

The subject of a Uniform System of Accounts to be prescribed for and 
kept by carriers being under consideration, the following order was 
entered : 

It is ordered, That the Classification of Operating Revenues and Operat- 
ing Expenses of Steam Roads and the text pertaining thereto, embodied in 
printed form to be hereafter known as Issue of 1914, a copy of which is 
now before this Commission, be, and is hereby, approved; that a copy 
thereof duly authenticated by the Secretary of the Commission be filed 
in its archives, and a second copy thereof, in like manner authenticated, in 
the office of the Division of Carriers’ Accounts; and that each of said 
copies so authenticated and filed shall be deemed an original record thereof. 

It is further ordered. That the said Classification of Operating Revenues 
and Operating Expenses of Steam Roads, with the text pertaining thereto, 
be, and is hereby, prescribed for the use of carriers by rail (exclusive of 
electric railways) subject to the provisions of the Act to Regulate Com- 
merce as amended, in the keeping and recording of their operating revenue 
and operating expense accounts; that eadi and evexy such eaxtier and eadi 



Appendix B 171 

and every receiver or operating trustee of any such carrier be required 
to keep all operating revenue and operating expense accounts in conformity 
therewith ; and that a copy of the said issue be sent to each and every such 
carrier and to each and every receiver or operating trustee of any such 
carrier. 

It is further ordered, That any such carrier or any receiver or operating 
trustee of any such carrier may subdivide any primary account established 
in the said issue or may make assignment of the amount credited 
or charged to any such primary account to operating divisions, to its 
individual lines, or to States: Provided, however, That such subprimary 
accounts set up or such assignments made by any such carrier or by any 
receiver or operating trustee of any such carrier do not impair the in- 
tegrity of the accounts hereby prescribed: And provided also, That a list 
of such subprimary accounts set up or such assignments made be first 
filed in the office of the Division of Carriers* Accounts, subject to disap- 
proval by the Commission. 

It is further ordered, That in order that the basis of comparison with 
previous years be not destroyed, any such carrier or any receiver or 
operating trustee of any such carrier may, during the twelve months from 
the time that the said issue becomes effective, keep and maintain, in addi- 
tion to the operating revenue and operating expense accounts hereby pre- 
scribed, such portion or portions of its present accounts with respect to 
operating revenue and operating expense items as may be deemed desirable 
by any such carrier or by any receiver or operating trustee thereof, for 
the purpose of such comparison; or, during the same period, may main- 
tain such groupings of the primary accounts hereby prescribed as may be 
desired for that purpose. 

It is further ordered. That, unless otherwise ordered, any such carrier 
or any receiver or operating trustee of any such carrier may keep any 
temporary or experimental accounts for revenues or expenses, the purpose 
of which shall be to develop the efficiency of operations : Provided, however. 
That such temporary or experimental accounts shall not impair the in- 
tegrity of any general or primary account hereby prescribed. 

It is further ordered. That July 1, 1914, be, and is hereby, fixed as the 
date on which the said issue of the Classification of Operating Revenues 
and Operating Expenses of Steam Roads shall become effective. 

By the Commission : 

[seal.] George B. McGinty, 

Secretary. 



172 Analysis of Railroad Operations 

INTRODUCTORY LETTER. 


Interstate Commerce Commission, 
Division op Carriers* Accounts, 
Washington, May ig, 1914. 
To Accounting Officers of Steam Railways : 

This Qassification of Operating Revenues and Operating Expenses su- 
persedes the Classification of Operating Revenues, First Issue, effective 
July 1, 1907, and the Supplement thereto, effective July 1, 1908; the 
Qassification of Operating Expenses, Third Revised Issue, efiFective July 
1, 1907, and the Supplement thereto, effective July 1, 1908; and the Qassifi- 
cation of Revenues and Expenses for Outside Operations, First Issue, 
effective July 1, 1908. It also supersedes conflicting instructions con- 
tained in Accounting Bulletin No. 8. 

Accounts are provided in this classification for the revenues and expenses 
of operations which heretofore have been classed as auxiliary or outside 
operations. The purpose in merging these accounts has been to secure 
a statement of revenues and expenses in connection with the operation of 
all physical property the cost of which is includible in the accounts for 
investment in road and equipment. 

The accounts for maintenance of physical property have been arranged 
to correspond with those for the investment in such property. Depreciation 
accounts have been provided for the current depreciation of fixed im- 
provements, although until further directed the recognition in operating 
expenses of current depreciation of fixed improvements is optional with the 
carrier. It is provided that organization and general administration ex- 
penses directly assignable to investments in stocks, bonds, and other securi- 
ties shall be excluded from the accounts of this classification and included 
in income account No. 549, “Maintenance of investment organization.” 

The general and special instructions contain a comprehensive statement 
of the principles underlying the classification, indicating generally the ap- 
plication of the accounting rules. The attention of accounting officers 
is called to the importance of requiring all employees who are assigned 
to accounting work in connection with operating revenues and operating 
expenses to familiarize themselves thoroughly with these instructions. 

In the preparation of the revision of the accounting rules contained in 
this and other classifications for steam roads, which are concurrently 
issued, the Commission has had the cooperation of the Association of 
American Railway Accounting Officers and of its Standing Committee 
on Corporate, Fiscal, and General Accounts. 

The classification, in tentative form, has been presented for criticism and 
suggestions to the chief accounting officer of each railway and to the 
railway commissions of the several States. All suggestions received from 
such parties have been given careful consideration, and many of them 
have been incorporated in the classification as here issued. 

Fred W. Sweney, 
Chief Examiner of 



Appendix B 

GENERAL INSTRUCTIONS. 


m 


The carrier’s records shall be kept with sufficient particularity to show 
fully the facts pertaining to all entries made in the accounts provided 
herein for railway operations. Where the full information is not recorded 
in the general books, the entries therein shall be supported by other records 
in which the full details shall be shown. Such general book entries shall 
contain sufficient reference to the detail records to permit ready identifica- 
tion, and the detail records shall be filed in such manner as to be readily 
accessible for examination by representatives of the Interstate Commerce 
Commission. 


1. Operating Accounts.— The accounts of this classification are de- 
signed to show the revenues and expenses (including the maintenance of 
the facilities used) of the carrier’s railway operations, including rail-line 
transportation, water-line transportation, if any, and services incident to 
transportation. 

Transportation includes the receipt, conveyance, and delivery of traffic. 

RaiUhne transportation includes not only the conveyance of traffic over 
tracks, but also the necessary conveyance by water transfers (ferriage, 
lighterage, and floatage) either between track terminals or between track 
terminals and points not reached by tracks, such as the water transfers at 
present operated by carriers having track terminals at New York harbor, 
and the water transfers at present operated by the— 

Ann Arbor Railroad Company between Frankfort, Mich., and Manistee, 
Mich., Menominee, Mich., Kewaunee^ Wis., and Manitowoc, Wis, 

Atdiison, Topeka & Santa Fe Railway Company between Ferry Point, 
Cal., and San Francisco, Cal. 

Morgan’s Louisiana & Texas Railroad & Steamship Company across the 
Mississippi River near New Orleans, La. 

Nashville, Chattanooga & St. Louis Railway between Incline, Ala., and 
Gimters Landing. Ala, 

New York, Ptiiladelphia & Norfolk Railroad Company between Cape 
Charles, Va,, and Norfolk, Va. 

Southern Railway Company between Pinners Point, Va., and Norfolk, Va, 

Southern Pacific Company between Oakland, Cal., and San Francisco, Cal. 

Water4ine transportation includes the transportation of local traffic from 
port to port, and the transportation of both local and interline rail land 
water-line traffic from port to port, such as the water-line transportation 
operations at present conducted by the— 

Baltimore, Chesapeake & Atlantic Railway Company on Chesapeake Bay 
and the Potomac River. 

Central Railroad Company of New Jersey between New York, N. Y., 
and Atlantic Highlands, N. J, 

Erie Railroad Company between Buffalo, N. Y,, and Manitowoc, Wis., 
Milwaukee, Wis., and Chicago, 111. ^ ^ , 

Southern Pacific Company between New York, N. Y., and New Orleans, 
La.; between New York, N. Y., and Galveston, Tex. ; between . New 
Orleans, La., and Habana, Cuba; and between San Francisco, Cab, and 
Sacramento, Cab 



174 Analysis of Railroad Operations 

Incidental revenues from meals, liquors, books, periodicals, etc., sold on 
vessels, have, because of established practice, been provided for in the 
primary accounts included in revenue general account II, Transportation — 
Water Line. 

Carriers are at liberty to subdivide the general and primary accounts 
here given, but if this option be exercised a statement of the accounts 
adopted shall be filed in the office of the Division of Carriers’ Accounts of 
the Interstate Commerce Commission. 

The carrier means the accounting carrier, except when otherwise specific- 
ally indicated. 

2. Unaudited Items Affecting Operating Accounts.— When for any 
cause the amount of any item affecting operating revenues or operating 
expenses can not be accurately determined in time for inclusion in the 
accounts of the month in which the transaction occurs, the amount of the 
item shall be estimated and in such form charged or credited to operating 
accounts and credited to balance-sheet account No. 778, “Other unadjusted 
credits,” or charged to balance-sheet account No. 727, “Other unadjusted 
debits,” as may be appropriate, the necessary adjustments being made later 
when the item is audited. The carrier is not required to anticipate minor 
items which would not appreciably affect the operating accounts. 

3. Delayed Items. — When no provision has been made through entries 
in the accounts of these classifications for anticipating delayed items 
chargeable or creditable to the accounts herein, and the amount of any 
such item is relatively so large that its inclusion in the accounts for a 
single year would seriously distort those accounts, the carrier, if so au- 
thorized upon application to the Interstate Commerce Commission, shall 
distribute to Profit and Loss so much of the amount as may be authorized. 

The carrier shall file with the Commission for approval the full particu- 
lars concerning each such item and the reasons which, in its judgment, in- 
dicate the propriety of such accounting. 

When the amount of a delayed item is relatively so large that its 
inclusion in the accounts for a single month will seriously distort those 
accounts it may be distributed in equal monthly charges to the remaining 
months of the current fiscal year. 

Delayed items are items representing transactions which occurred before 
the current fiscal year. 

4. Miscellaneous Operations. — The revenue and expenses of miscel- 
laneous operations involving the use of such facilities as hotels and 
restaurants, power plants, cold-storage, plants, coal-storage plants, cotton- 
compress plants, wood-preserving plants, ice-supply plants, etc., shdl not be 
Included in the accounts of this classification when the facilities used are 
distinct from^ those used by the carrier in the service of transportation 
or in ^e maintenance of facilities used in transportation service, and the 
operations are not incident to such service. (See income accounts No. 502, 
“Revenues from miscellaneous operations,” and No. 534, “Expenses of 
miscellaneous operations,” and balance-sheet account No. 705, “Miscellane- 
ous physical property.”) 

S. Submission of Questions,— To the end that uniformity of accounting 
may be maintained from year to year, carriers shall submit all questions 
of doubtful interpretation of the accounting rules to the Commission for 
consideration and decision. 



Appendix B 


175 


OPERATING REVENUE ACCOUNTS. 


SPECIAL INSTRUCTIONS. 


1. Accounts for Operating Revenues.-— The accounts provided for op- 
erating revenues are designed to show amounts of money which a carrier 
becomes entitled to receive from transportation and from operations in- 
cident thereto. 

Credits to the revenue accounts shall as nearly as practicable be upon 
the basis of accruals of revenue. 

No charge shall be made against the accounts of this classification for 
amounts representing tariff charges which for any cause are uncollected, 
the service for which the charge is made having been properly performed 
and individuals or companies being liable for the charges. 

Uncollectible charges against individuals and companies, representing 
tariff charges for transportation service rendered for which such individ- 
uals and companies are liable, shall be charged to income account No. 533, 
‘TJncollectible railway revenues.’^ This includes items such as charges 
where credit has been extended and the debtor becomes insolvent, and also 
uncollectible undercharges discovered after the service has been rendered. 

Uncollected tariff charges on unclaimed and refused shipments of freight, 
such refused shipments having been transported in accordance with the 
contract of shipment, shall be charged to a suspense account, to which 
shall be credited, to the extent of the tariff charges included therein, the 
proceeds derived from the sale of such unclaimed and refused freight. 
When the excess of the tariff charges over the amount realized from the 
sale of the freight is found to be uncollectible, it shall be cleared to 
income account No. 533, “Uncollectible railway revenues.” 

When the amount realized from the sale of such unclaimed and refused 
freight exceeds the amount of the tariff charges for the transportation 
thereof, the excess (if lawfully retained by the carrier) shall be credited 
to profit and loss account No. ^7, “Miscellaneous credits.” 

The carrier's tariff charges on lost, destroyed, or damaged shipments, 
for which charges neither consignee nor consignors are liable, shall be 
charged to the revenue accounts previously credited. 

Overcharges, when discovered, shall be credited to balance-sheet account 
No. 778, “Other unadjusted credits,” and when found to be tmrefundable, 
shall be cleared to profit and loss account No. 60S, “Unrefundable over- 
charges.” 

2. Interpretation of Item Lists,— Lists of items to be credited and 
of items to be charged have been given as a part of the text of tins 
classification for the purpose of clearly iiidicating the dppH<^tion of the 
accounting rules. They are not to be cohsidexed as comprising all the 



176 Analysis of Railroad Operations 

hems creditable or chargeable to the several accounts, but merely as repre- 
sentative of them. 

The items contained in the lists of items to be charged to the respective 
accounts are chargeable only when such items have been, through over- 
sight, included in the credits to the accounts, or they are items of revenue 
payable to others for service to be rendered in accordance with the tariff 
provisions applicable to the rates upon which the credits to the several 
accounts have been based. 


TEXT PERTAINING TO OPERATING REVENUE ACCOUNTS. 


L TRANSPORTATION— RAIL LINE. 

The primary accounts included in this general account are designed 
to show amounts of money which the carrier becomes entitled to 
receive or which accrue to its benefit from service rendered in 
transporting property or persons by rail line. (See general instruc- 
tions, section 1.) 

101. FREIGHT. 

This account shall include revenue from the transportation of 
freight and from transit, stop, and reconsigning privileges, upon the 
basis of lawful tariff rates. 

ITEMS TO BE CREDITED. 

(See special instructions, section 2.) 

(a) Revenue upon the basis of local freight tariff rates, regardless of 
class of train in which the freight is transported. 

(&) The carrier's proportion of revenue upon the basis of through 
freight tariff rates, regardless of class of train on which the 
freight is transported. 

(c) Revenue from transportation of mail matter, and empty mail 

pouches, of freight tariff rates. 

(d) Revenue from transportation of freight on special trains at 

rates based on weights of shipments. 

(e) Revenue on basis of classifications and freight tariffs from trans- 

portation of caretakers of freight shipments. 

(/) Revenue from reconsigning privileges, 

{g) Revenue from stop privileges. 

(h) Revenue from transit privileges. 

(f) Revenue upon the basis of arbitraries out of freight rates for 

water transfers (ferriage, lighterage, and floatage). 

ITEMS TO BE CHARGED. 

(See special instructions, section 2.) 

Amounts paid as bridge and ferry arbitraries on freight. 

Amounts paid for completing a haul. 

Amounts paid for elevation of freight. 



Appendix B 177 

Amounts paid for switching services, in connection with the trans- 
portation of freight, on the basis of switching tariffs, and allowances 
out of through rates, including amounts paid for switching empty 
cars in connection with a freight revenue movement 
Amounts paid for transferring freight between stations* 

Arbitraries and allowances to others for lighterage and wharfage. 
The carrier's proportion of overcharges resulting from the use of er- 
roneous rates, weights, classifications or computations. 

The carrier’s proportion of refunds on account of errors in routing 
and billing. 

The carrier's proportion of uncollected revenue on freight lost or 
destroyed in transit 

The carrier's proportion of uncollected tariff charges on damaged 
shipments for which charges neither shipper nor consignee is liable. 

Note A.— -Amounts paid for switching empty cars otherwise than in 
connection with loaded movements shall be charged to operatii^ 
expense account No. 411, ''Other expenses,” except that amounts paid 
for switching equipment for repairs shall be included in the appro- 
priate equipment repair accounts. 

Note B.-— Other carriers’ proportion of revenue and of uncollectible 
undercharges paid by the carrier on account of its errors in routing 
and billing shall be charged to operating expense account No. 411» 
"Other expenses.” 

Note C— Other carriers’ proportion of revenue paid by the carrier 
on freight lost, destroyed, or damaged in transit, for which neither 
consignees nor consignors are liable shall be charged to operating 
expense account No. 418, "Loss and damage— Freight” 

Note D.— When a lessee company transports freight over the trades 
of another carrier on the basis of a proportion of revenues under a 
joint arrangement, it shall indude the entire compensation in its 
revenues and statistics, charging the appropriate joint facility expense 
and rental accounts with the amounts paid the lessor company, and 
the lessor company shall credit the corresponding accounts. 

Note E.— The accrued revenue derived from the transportation of 
cream, sweet milk, etc., on a basis of lawful tariffs at rates per 
package, regardless of weights, shall be induded m account Na 
lOQ^filk.” 

Note F.— Revenue from the transportation of caretakers of freight 
shipments, when not induded as a part of the freight charges on the 
waybill covering the freight shipments, shall be credited to account 
No. 102, "Passenger.” 

102. PASSENGER. 

This account shall indude the revenue from the transportation of 
passengers, based upon tariff fares for passengers so transported; 
also from the transportation at special fares of excepted classes of 
passengers as provided law. 

ITEMS TO BE CBEDISm 

(See special instructiotis, section 2.) 

(a) Revenue upon the basis of local tariff fares* 

(b) The carrier’s proportion of revenue upon the Ixtsis of 

tariff fares. 

(c) Revenue from extm faies on Htnited trali^ 



xy8 Analysis of Railroad Operations 

{d) Revenue from additional fares for exclusive use of drawing 
rooms or state rooms. 

(^) Revenue from mileage and scrip coupons honored. 

(/) Revenue from transportation of corpses. 

\g) Revenue from transportation of passengers on special trains at 
fares based on rate per capita. 

Qt,) Revenue upon the basis of arbitraries out of passenger fares 
for water transfers (ferriage). 

ITEMS TO BE CHARGED. 

(See special instructions, section 2.) 

Amounts paid as bridge and ferry passenger arbitraries. 

Amounts paid for switching empty passenger-train cars in connection 
with the transportation of passengers on the basis of tariff fares 
for passengers so transported. 

Amounts paid for switching services in completing a transportation 
movement. 

Amounts paid for transferring passengers or baggage between sta- 
tions or connecting lines. 

Redemptions of unused and partially unused local passenger tickets. 
Refunds of extra fares on limited trains. 

Refunds of local tariff fares. 

The carrier’s proportion of redemptions of unused and partially un- 
used through passenger tickets. 

The carrier’s proportion of refunds of through tariff fares. 

The carrier’s proportion of overcharges resulting from the application 
in error of fares in excess of tariffs. 

Note A, — Refundable cash fare penalty collections made by con- 
ductors, and the refundable portions of amoimts derived from the 
sales of mileage tickets, mileage credentials, and scrip shall not be 
credited to this account but to an appropriate suspense account. 

Note B, — This account shall be credited with the cash value of 
coupons from mileage tickets and scrip only as they are honored 
for transportation. Gross receipts from mileage tickets and scrip 
when sold shall be credited to an open account. The open account 
shall be charged and this account credited with the cash value of 
coupons as honored. 

Note C. — When a lessee company transports passengers over the 
tracks of another carrier on the basis of a proportion of revenues 
under a joint arrangement, it shall include the entire compensation 
in its revenues and statistics, charging the appropriate joint facility 
expense and rental accounts with the amoimts paid the lessor company, 
and the lessor company shall credit the corresponding joint facility 
accounts. 

Note D. — Amounts paid for switching empty passenger-train cars 
otherwise than in connection with loaded movements shall be charged 
to operating expense account No. 411, “Other expenses,” except that 
charges for switching equipment for repairs shall be included in the 
appropriate equipment repair accounts. 

m EXCESS BAGGAGE. 

This account shall include the revenue from the transportation of 
baggage in excess of free authorized allowances on the basis of ex- 
cess baggage tariff rates. 



Appendix B 179 

To this account shall be credited the cash value of coupons from 
baggage scrip books only as the coupons therefrom are honored for 
transportation of excess baggage. 

Note A.-“Revenue derived from the transportation of shipments of 
silk, fish, etc., in passenger trains at freight tariff rates shall be in- 
cluded in account No. 101, “Freight" 

Note B.—Revenue derived from the transportation of packages, 
articles, dogs, etc., on passenger trains on the basis of passenger tarifif 
rates shall be included in account No. 108, “Other passenger*train.” 

Note C.— The refundable portions of amounts derived from the 
sale of baggage scrip books shall not be credited to this account 

Note D.— The gross receipts from baggage scrip books when sold 
shall be credited to an open account The open account shall be 
charged and this account credited with the cash value of coupons 
as honored. 

104, SLEEPING CAR. 

This account shall include the revenue from berth and seat accom-^ 
modations furnished in sleeping cars on the basis of berth or seat 
rates for the space occupied. 

105. PARLOR AND CHAIR CAR. 

This account shall include the revenue from seat accommodations 
furnished in parlor, observation, chair, and other special passenger cars 
when operated in passenger-train service or In special-train service 
at seat rates for space occupied. 

106. MAIL. 

This account shall include the revenue from the transportation 
of mail at established rates for specified routes ; from the use of rail- 
way post-office cars when in carrier’s service transporting malls; 
from the use of special mail facilities ; and from bonuses for special 
mail transportation. 

To this account shall be charged fines and penalties imposed by the 
Government when not collected from agents or employees. 

Note.— The revenue from the transportation of mail matter and 
empty mail pouches on freight trains at freight tariff rates shall be 
included in account No. 101, “Freight” 

107, EXPRESS. 

This account shall include the revenue from transportation of ex- 
press matter and from use of facilities on trains and at stations 
incident to such transportation. 

When a railway company trmisacts an express business through its 
regular railway organization, the revenue therefrom shall be credited 
to this account 

Note.— When contracts for express privileges provide specific 
amounts for the rent of facilities at stations, such amounts shall be 
included in revenue account No. 142, “Rents of buildings and other 
property.” 



i8o Analysis of Railroad Operations 

108. OTHER PASSENGER TRAIN. 

This account shall include the revenue from transportation incident 
to the operation of passenger trains, not provided for otherwise. 

LIST OF ITEMS. 

(See special instructions, section 2.) 

(a) Revenue from transportation of packages, newspapers, articles, 

does, etc., on passenger trains at other than freight or excess 
baggage rates. 

(b) Revenue received under a guaranteed lump-sum minimum for the 

transportation of passengers on regular or chartered trains, in 
excess of regular tariff fares for the passengers actually 
transported. 

(c) The carrier’s proportion of revenue derived from the operation 

over its line of sleeping, parlor, chair, observation, and other 
special cars owned and operated by other companies. 

(d) Unclaimed penalty collections on trains. 

le) Value of the portions of mileage tickets, mileage coupons, and 
scrip books unpresented and unredeemed. 

m MILK. 

This account shall include the revenue from the transportation of 
cream, sweet milk, skim milk, sour milk, buttermilk, condensed milk, 
butter fat, and smear-case or pot cheese, upon the basis of lawful 
tariffs at rates per package, regardless of weights. 

Note.— The revenue from the transportation of milk upon the basis 
of lawful tariffs at rates per specified weights shall be included in 
revenue account No, 101. *Treight.'' 

no. SWITCHING. 

This account shall include the revenue from switching service 
upon the basis of lawful tariff rates. 

To this account shall be credited the carrier’s revenue upon the 
basis of tariff rates, or the carrier’s allowance out of through 
rates, from the switching of cars of all kinds, loaded or empty, 
either locally at a station or within a switching district, between con- 
necting lines, between local industries, or between connecting lines 
and local industries; revenue upon the basis of distinct tariff rates 
for “trap-car” and “ferry-car” service and for spotting cars; also 
the revenue from interwork switching at industrial plants, and the 
revenue from “penalty switching^’ incident to the improper delivery 
of cars by other carriers. 

To this account shall be charged amounts paid others for switching 
when such switching service is provided for in the switching rate 
charged by the carrier. 

Note.— ‘Penalty switching” charges paid by the carrier shall be in- 
cluded in expense account No, 411, “Other expenses.” 

Hi. SPECIAL SERVICE TRAIN. 

This account shall include the revenue from running trains either 
on the basis of a rate per mile or a lump-sum rate for the tram. 



Appendix B 


tBi 


LIST OF ITEMS. 

(See special instructions, section 2.) 

(a) The carrier’s revenue from handling baggage cars in spedai 

trains for theatrical companies. 

(b) The carrier’s revenue from handling circus or theatrical company 

trains on basis of specific amounts for transportation between 
designated stations. 

(c) The carrier’s revenue from running trains for Federal or State 

Governments to transport troops, war munitions, camp out- 
fits, etc. 

Note A.— No account need be kept of the number of tons and ton- 
miles or of passengers and passenger-miles where the revenues from 
a train are properly creditable to this account. 

Note B. — The revenue derived from the transportation of freight 
and passengers on a special train, upon the basis of a rate per pound, 
per hundredweight, or per ton for freight, and a rate per capita for 
passengers shall be credited to revenue accounts No. 101, “Freight,” 
and No. 102, “Passenger,” in accordance with the charges for each 
class of transportation service. Such trains shall be classified as 
freight, passengef, or mixed, as may be appropriate under the classifi- 
cation of train, locomotive, and car miles. 

112. OTHER FREIGHT TRAIN. 

This account shall include the revenue from transportation inddent 
to the operation of freight trains not otherwise provided for, such 
as revenue in excess of tariff rates for the transportation of freight 
in revenue trains, with a guaranteed lump-sum minimum, 

113. WATER TRANSFERS-FREIGHT. 

This account shall include the revenue from the transfer of freight 
by water transfers (ferriage, li^^iterage, and Hoatage) upon the basis 
of lawful tariff rates for local service. 

Note.— N o revenue shall be included in tliis account upon the basis 
of arbitraries out of rates for transportation involving rail line haul. 

114. WATER TRANSFERS-PASSENGER. 

This account shall include the revenue from the transfer of pas* 
sengers by water transfers (ferriage) upon the basis of lawful tariff 
rates for local service. 

Note.— No revenue shall be included in this account upon the basis 
of arbitraries out of rates for transportation involving rail line con- 
veyance. 

ns. WATER TRANSFERS-VEHICLES AND LIVE STOCK. 

This account shall include the revenue from the transfer by water 
transfers upon the basis of lawful local tariff rates, of vehicles of 
all classes ; horses, cattle, and other animals ; and Government artillery 
and equipment. 

Note.— No revenue shall be included in this account upon the basis 
of arbitraries out of rates for transportation involving rail line haul. 



i 82 Analysis of Railroad Operations 

116. WATER TRANSFERS-OTHER. 

This account shall include the revenue from water transfers not 
otherwise provided for, such as the revenue from towing beyond 
lighterage limits and all other towing for which an extra charge is 
made; insurance of freight afloat when billed out at other than cost; 
storage of freight afloat; grain overage in boats; pumping performed 
for outside parties; and from other similar sources. 

To this account shall be charged amounts payable to other com- 
panies or individuals for extra lighterage, extra towing, and for all 
other service when such payments represent revenue collected and 
credited to this account and not a direct expense. 

IL TRANSPORTATION— WATER LINE. 

The primary accounts included in this general account are de- 
signed to show amounts of money which the carrier becomes en- 
titled to receive or which accrue to its benefit from service rendered 
in transporting property or persons by water lines. (See general 
instructions, section 1.) 

121. FREIGHT. 

This account shall include the revenue from the transportation of 
freight by water-line service upon the basis of lawful tariff rates. 

ITEMS TO BE CBEDITED- 

(See special instructions, section 2.) 

(a) Revenue upon the basis of local freight tariff rates. 

(b) Carriers proportion of revenue upon the basis of through tariff 

rates, 

(c) Revenue from the transportation of mail matter and empty mail 

pouches at freight tariff rates. 

(d) Revenue on the basis of classifications and freight tariffs from 

the transportation of caretakers of freight shipments. 

(c) Arbitraries allowed in rates for cargo insurance. 

ITEMS TO BE CHARGED. 

(See special instructions, section 2.) 

Amounts paid for completing a haul. 

Amounts paid for elevation of freight. 

Amounts paid for transferring freight between stations or connecting 
lines. 

Arbitraries and allowances to others for lighterage and wharfage. 
Carrier's proportion of overcharges resulting from the use of errone- 
ous weights, rates, classifications, or computations. 

Carrier's proportion of refunds on account of errors in routing or 
billing. 

Carrier’s proportion of uncollected revenue on freight lost or de- 
stroyed in transit. 

Carrier's proportion of uncollected tariff charges on damaged ship- 
ments for which charges neither shipper nor consignee is liable. 





Appendix B 183 

Note A. — Other carriers* proportion of revenue and of uncollectible 
undercharges paid by the carrier on account of errors in routing and 
billing shall be charged to operating expense account No. 432, “Opera- 
tion of terminals.” 

Note B. — Other carriers* proportion of revenues paid by the carrier 
on freight lost or destroyed in transit shall be charged to operating 
expense account No, 433, “Incidental.” 

Note C. — If the carrier maintains a transfer or lighterage service 
the expenses of which are included in expense account No. 432, 
‘‘Operation of terminals/* the revenues arising from the service 
shall be included in account No. 128, “Other/* If the service is per- 
formed by an outside party, its cost to the carrier shall be charged 
to the appropriate revenue account. 

Note D. — Revenue from the transportation of caretakers of freight 
shipments, when not included as a part of the freight charges on the 
^yaybill covering the freight shipments, shall be credited to account 
No. 122, “Passenger.” 

122. PASSENGER. 

This account shall include the revenue from the transportation of 
passengers by water-line service based on tariff fares for the pas- 
sengers so transported; also transportation at special fares of ex- 
cepted classes of passengers as provided by law. 

The credits to this account shall appear under appropriate sub- 
heads, as follows: 

(a) Revenue from the transportation of passengers, including sleep- 

ing accommodations and meals (when not separable). 

(b) Revenue from the transportation of passengers, not including 

sleeping accommodations and meals. 

(c) Revenue from the rent of staterooms, berths in staterooms, 

and other sleeping and living accommodations. 

(d) Revenue from the s3e of meals and food supplies. 

ITEMS TO BE CREOTTED, 

(See special instructions, section 2.) 

(a) Revenue upon the basis of local tariff fares. 

(b) The carrier’s proportion of revenue upon the basis of through 

tariff fares. 

(c) Revenue from extra fares for limited service. 

(<?) Revenue from mileage and scrip coupons honored. 

(e) Revenue from the transportation of corpses. 

ITEMS TO BE CHARGED. 

(See special instructions, section 2.) 

Amounts paid for transferring passengers or baggage between stations 
or connecting lines. 

Redemptions of unused or partially unused local passenger tickets. 
Refunds of local tariff fares. 

The carrier’s proportion of redemptions of unused or partially un- 
used through passenger tickets. 

The carrier’s proportion of refunds of through tariff fares. 

The carrier’s proportion of overcharges resulting from the applica- 
tion in error of fares in excess of tariffs. 



184 Analysis of Railroad Operations 

Note, — ^This account shall be credited with the cash value of coupons 
from mileage tickets and scrip only as they are honored for trans- 
portation. Gross receipts from mileage tickets and scrip, when 
sold, shall be credited to an open account. The open account shall 
be charged and this account credited with the cash value of the 
coupons as honored. 

123. EXCESS BAGGAGE. 

This account shall include the revenue from the transportation 
by water-line service of baggage in excess of free authorized allowance 
on the basis of excess baggage tariff rates; also the revenue from the 
transportation of packages, articles, dogs, etc., incidental to the trans- 
portation of passengers. 

To this account shall be credited the cash value of coupons from 
baggage scrip books only as they are honored for the transportation 
of excess baggage. 

Note A. — The refundable portion of amounts derived from the sale 
of baggage scrip coupons shall not be credited to this account. 

Note B. — ^The gross receipts from baggage scrip books, when sold, 
shall be credited to an open account. The open account shall be 
charged, and this account credited with the cash value of coupons 
as honored. 

124. OTHER PASSENGER SERVICE. 

This account shall include revenue, not otherwise provided for, 
incident to the transportation of passengers. 

ITEMS TO BE CREDITED. 

(See special instructions, section 2.) 

(a) Revenue from the sale of tobacco, cigars, cigarettes, etc. 

(b) Revenue from the sale of books, periodicals, and other news- 

stand supplies. 

(c) Revenue from the rent of steamer chairs and rugs. 

125. MAIL. 

This account shall include the revenue from the transportation of 
mail by water-line service at established rates for specified routes; 
from the use of special facilities; and from bonuses for special 
mail transportation. 

To this account shall be charged fines and penalties imposed by 
the Government when not collected from agents or employees. 

Note. — The revenue from the transportation of mail matter and 
empty mail pouches at freight tariff rates shall be included in account 
No. 121, “Freight.” 

126. EXPRESS. 

This account shall include the revenue from transportation of ex- 
press matter by water-line service, and from the use of facilities 
on vessels and at stations incident to such transportation. 

When a carrier transacts an express business by water line through 
its regular organization, the earnings therefrom shall be credited 
to this account 



Appendix B 185 

Note.— When contracts for express privileges provide specific 
amounts for the rent of facilities at stations, such amounts shall 
be included in revenue account No. 142, ‘‘Rents of buildings and 
other property.” 

127. SPECIAL SERVICE. 

This account shall include the revenue from running vessels on 
excursions or special trips when specific charges not based on the 
number of passengers carried are made for transportation between 
designated points; and from running special trips carrying troops, 
munitions of war, camp outfits, etc., for the Federal or State Gov- 
ernments when specific lump amounts are charged for the trans- 
portation. 

Note. — Lump sums received for passenger excursions or for special 
trips ordinarily designated as “charter of vessels,” shall be treated 
as revenue incident to transportation, rather than as rent, and shall 
be included in this account. 

128. OTHER. 

This account shall include the revenue from transportation by water 
line not provided for elsewhere. 

Note. — Revenues upon the basis of distinct tariff rates from 
services rendered and facilities furnished on ^wharves and at stations 
incident to the operation of water-line service shall be included in 
the primary accounts under general account III, Incidental. 

III. INCIDENTAL. 

The primary accounts included in this general account are designed 
to show the amounts which the carrier becomes entitled to receive 
from services rendered incidentally with rail-line and water-line 
transportation, for the use of facilities of which the expenses for 
operation and maintenance are not separable from railway expenses^ 
and from incidental sources not provided for elsewhere. 

The accounts for incidental revenue shall be kept in such manner as 
to show separately, by primary accounts, the revenue from services 
rendered and facilities furnished on wharves and at stations incident 
to the operation of water-line service. 

131. DINING AND BUFFET. 

This account shall include the revenue from dining and buffet 
service on trains and transfer boats. 

ITEMS TO BE CREBZTED. 

(See special instructions, section 2.) 

(a) Revenue from lunches furnished. 
lb) Revenue from meals furnished. 

(c) Revenue from liquors furnished. 

(d) Revenue from tobacco furnished. 

(e) Revenue from cigars and cigarettes furnished. 

NoTE.“-The revenue from dining and buffet service , on vessels 
whi<i are operated in water-line service is provided for in the 
primary accounts included in general account XI, Transportation*^ 
water Line. 



1 86 Analysis of Railroad OperaHons 

132. HOTEL AND RESTAURANT. 

This account shall include the revenue from hotels, restaurants, 
and station lunch counters. (See general instructions, section 4.) 


ITEMS TO BE CREDITED. 

(See special instructions, section 2.) 


(a) Revenue from the rent of 

rooms. 

(b) Revenue from the use of 

baths. 

(c) Revenue from the use of 

billiard tables. 

(d) Revenue from the use of 

bowling alleys. 

(e) Revenue from lunches fur- 

nished. 

(f) Revenue from meals fur- 

nished. 

(^) Revenue from liquors fur- 
nished. 


(h) Revenue from tobacco fur- 
nished. 

i) Revenue from cigars furnished. 

/) Revenue from cigarettes fur- 
nished. 

(k) Revenue from newspapers fur- 
nished. 

(/) Revenue from periodicals fur- 
nished. 

(m) Revenue from tonsorial serv- 
ice, 

(») Revenue from laundry work. 


Note. — This account shall not include the revenues from hotels and 
restaurants which are entirely distinct from the carrier's transportation 
plant and the cost of which is included in balance-sheet account 
No. 70S. ^'Miscellaneous physical property.” 

133. STATION, TRAIN, AND BOAT PRIVILEGES. 

This account shall include revenue from weighing, vending, and 
other automatic machines located at stations; from advertising at 
stations and on trains and on transfer boats; from the privilege of 
operating news stands at stations and selling papers, periodicals, 
fruit, etc., on trains and on transfer boats; from telephone com- 
panies for the privilege of installing and operating commercial tele- 
phones at stations; from the operation of eating houses and dining 
and buffet service on trains and transfer boats when such operation 
is conducted by individuals or companies other than railway companies 
and when the expenses incurred by the carrier in connection there- 
with are not separable from its regular operating expenses; and 
from similar sources. 


Note. — ^The revenue from privileges on vessels operated in water- 
line service is provided for in the primary accounts included in general 
account II, Transportation— Water Line. 

134. PARCEL ROOM, 

This account shall include the revenue from the operation of parcel 
rooms. 

135. STORAGE-FREIGHT. 

This account shall include the revenue from the storage of freight. 

136. STORAGE-BAGGAGE. 

This account shall include the revenue from the storage of baggage. 



Appendix B 


187 


137. DEMURRAGE. 

This account shall include the revenue from the detention of cars 
incident to loading, unloading, reconsigning, and stops in transit 
upon the basis of lawful tariffs for demurrage. 

138. TELEGRAPH AND TELEPHONE. 

This account shall include the revenue from commercial telegraph 
and telephone operations; also amounts received from telegraph and 
telephone companies, whether as a proportion of earnings or other- 
wise, for the privilege of transacting a commercial telegraph or 
telephone business in offices along the carrier's lines, when the carrier 
furnishes some service of employees whose pay is included in its 
operating expenses. 

Note. — When a telegraph or telephone company rents the telegraph 
or telephone line of the carrier and pays all expenses incident to its 
maintenance and operatic^ the rent received shall be credited to in- 
come account No. 510, ‘‘Miscellaneous rent income.” 

139. GRAIN ELEVATOR. 

This account shall include the revenue from the operation of grain 
elevators. (See general instructions, section 4.) 


ITEMS TO B] 

(See special instru 
(u) Revenue from the elevation 
of grain. 

(h) Revenue from the storage 
of grain. 

(c) Revenue from bagging grain. 

(d) Revenue from screening 

grain. 

(e) Revenue from blowing grain. 
(/) Revenue from cooling grain, 
(ff) Revenue from clipping grain, 
(U) Revenue from cleaning 

grain. ^ ^ 

(t) Revenue from mixmg grain. 

140. STOCKYARD. 

This account shall include tl 
general instructions, section 4.) 


CREDITED. 

:tions, section 2.) 

(;) Revenue from transferring grain 
in elevators. 

(k) Revenue from loading grain 

into and unloading grain 
from boats not covered by 
elevation charges. 

(l) Revenue from trimming grain in 

boats when performed by 
elevator employees. 

(m) Revenue from the sale of 

screenings and sweepings. ^ 

(n) Revenue from inspecting grain 

in elevators. 


revenue from stockyards, (See 


ITEMS TE BE CREDITED. 

(See special instructions, section 2.) 


(u) Revenue from feeding live 
stock. 

(b) Revenue from watering live 
stock, 

(<) Revenue from bedding live 
stock, 

(d) Revenue from otherwise 
caring for live stock. 


(f) Revenue from shearing sheep, 
(f) Revenue from dipping sheep and 
cattle, 

((s;) Revenue from stabling horses. 
(A) Revenue from inspecting live 
stock. 



1 88 Analysis of Railroad Operations 

141. POWER. 

This account shall include the revenue from the sale of electric 
current and other power. (See general instructions, section 4.) 

142. RENTS OF BUILDINGS AND OTHER PROPERTY. 

This account shall include the revenue from the exclusive use of 
buildings and other property or portions thereof, such as depot and 
station grounds and buildings, general and other offices, wharves, 
ferry landings, elevators, stockyards, fuel yards, enginehouses, repair 
shops, and section and other houses, when the property is operated 
and maintained in connection with the property used in the carrier’s 
transportation operations and the expenses of maintaining and oper- 
ating the rented portion can not be separated from the expenses of 
that portion used by the carrier. (See general instructions, section 4.) 

Note. — ^When the expenses of maintaining and those of operating 
property rented to others are separable, the rents received shall be 
credited and the expenses of maintenance and operation shall be 
charged to appropriate income accounts. 

143. MISCELLANEOUS. 

This account shall include the revenue from railway operations, not 
provided for elsewhere. (See general instructions, section 4.) 

LIST OF ITEMS. 

(See special instructions, section 2.) 

(а) Amounts received for privilege of cutting hay along the right of 

way. 

(б) Commissions received for collecting premiums on insurance policies 

from employees and installment payments for books, watches, 
etc,, sold by dealers to employees. 

(c) Profit from jobbing and installing electric power lines for others. 

(d) Revenue from boat demurrage. 

(e) Revenue from freight and passenger privileges over a carrier’s 

wharves and docks. 

(/) Revenue from garnishee fees. 

(^) Revenue from operation of coal and ore wharves, cold-storage 
plants, coal-storage plants, cotton-compress plants, and wood- 
preserving plants. (See general instructions, section 4.) 

(h) Revenue from privilege of mooring and anchoring boats at 
wharves and docks. 

(0 Revenue from sale of cinders produced by carrier. 

(/) Revenue from use of carrier’s bridges by pedestrians, street car 
lines, vehicles, etc. 

(k) Revenue from temporary use of carrier’s tracks for detouring 
trains, etc. 

(/) Revenue from use of tracks incident to delays in loading or re- 
moving freight 

(m) Revenue from water furnished boats from water stations' oper- 

ated by the carrier. 

(n) Revenue from weighing cars. 

(o) The carrier’s proportion of gross revenue from operation of 

clergy bureaus. 




Appendix B 189 

ip) The carrier’s proportion of gross revenue from operation of 

ticket validation agencies. 

iq) Unclaimed deposits for prepaid transportatioa 

Note.— When a bridge of one carrier is jointly used by itself and 
another carrier and such use is paid for on the basis of fiat rent 
or charge per train-mile or toll per passenger, per ton, or per car, 
the compensation therefor shall be credited to t3ie appropriate joint 
facility, operating expense, and income accounts. 

IV. JOINT FACILITY. 

151. JOINT FACILITY-CR. 

This account shall include the carrier’s proportion of revenue col- 
lected by others in connection with tlie operation of joint tracks, 

' yards, terminals, and other facilities. 

Note A. — The purpose of this account is to show the amounts of 
revenue from the operation of joint tracks, yards, terminals, and other 
facilities operated by other companies, which under existing con- 
tracts or agreements are credited by the operating company to the 
tenant companies which participate therein. The bill rendered by any 
creditor company against a debtor company for the latter's ijroportion 
of the expense of maintenance and operation of joint facilities, which 
includes also a credit covering a proportion of the revenue to be paid 
over, shall show the distribution of the credit for such proportion of 
the revenue separately from the distribution of the expense of opera- 
tion. 

Note B. — No credits shall be made to this account representing 
amounts creditable by the operating company to primary accounts 
Nos. 101 to 109, 111 to 116, 121 to 128, 131, 132, 139 to 141. 

152. JOINT FACILITY-DR. 

This account shall include that proportion of revenue from die 
operation of joint tracks, yards, terminals, and other facilities, which 
is creditable to other companies. 

Note A. — The pui^ose of this account is to show the amount of 
revenue from operation of a terminal company or other carrier which, 
under the terms of existing contracts or agreements covering the 
joint use of tracks, yards, and other facilities, is credited to other 
carriers that participate in the benefits from such joint use. The 
bill rendered by a creditor company against a debtor company for 
the latter’s proportion of expense of maintaining and operating joint 
facilities, which includes a credit covering the debtor company’s 
proportion of the revenues from operation of such joint facilities, 
shall indicate separately the proper distribution of both the revenues 
and the expenses included in the bill, and such distribution shall be 
adhered to by the debtor. 

Note B. — No debits shall be made to tliis account representing 
amounts creditable by the operating company to primary accounts 
Nos. 101 to 109, 111 to 116, 121 to 128, 131, 132, 139 to 14L [This note 
cancelled Aug. 1, 1925.] 



1 90 Analysis of Railroad Operations 


OPERATING EXPENSE ACCOUNTS. 


GENERAL ACCOUNTS. 

Page 

I. Maintenance of way and structures 201 

11. Maintenance of equipment 225 

III. Traffic 242 

IV. Transportation— Rail line 246 

V. Transportation— Water line 273 

VI. Miscellaneous operations 277 

VIL General 281 

VIII. Transportation for inyestment— Cr. 286 

SPECIAL INSTRUCTIONS. 

1. Accounts for operating expenses 191 

2. Maintenance expenses 191 

3. Cost of repairs 192 

4. Royalties on appliances 193 

5. Fixed improvements retired and replaced 193 

6. Distribution of charges for property retired and replaced 193 

7. Charges to operating expenses for fixed improvements converted 193 

8. Depreciation of fixed improvements 194 

9. Joint facility accounts 194 

10. Clearing accounts 194 

11. Gravel and sand pits and quarries 194 

12. Power plant operations 195 

13. Power substation operations 196 

14. Maintaining transmission and distribution systems 196 

15. Shop expenses 196 

16. Material store expenses 199 

17. Stationery store expenses 199 

18. Insurance 199 

19. Equalization of expenses ’ 199 

20. Balances in operating reserves 200 

21. Subprimary accounts for water lines and electric divisions 200 

22. Interpretation of item lists 200 



Appendix B 


191 


1, Accounts for Operating Expenses.— The accounts prescribed for 
operating expenses are designed to show expenses of furnishing trans- 
portation service, including the expenses of maintaining the plant used in 
the service. The accounting shall be as nearly as practicable upon the 
basis of accruals; however, the option is allowed the carrier of omitting 
charges to the accounts provided for the depreciation of fixed improvements 
and of including the depreciation (ledger value less salvage) of such 
property in the appropriate repair accounts at the time the property is 
converted or retired for replacement 

Fixed improvements means structures which are fixed as to location, 
such as tunnels, bridges, buildings, earthworks, etc. 

2. Maintenance Expenses. — ^The accounts provided for maintenance of 
fixed improvements and of equipment are designed to show the cost of 
repairs and also the loss through depreciation of the property used in 
operations, including all such expenses resulting from ordinary wear and 
tear of service, exposure to the elements, inadequacy, obsolescence, or 
other depreciatiem, or from accident, fire, flood, or other casualty. 

The cost of repairs which has been provided for in the several repair 
accounts shall include the cost of inspecting to determine the repairs neces- 
sary, and of adjusting, repairing, or replacing parts, both of fixed im- 
provements and of equipment, such as the repairing of locomotives, cars, 
frogs and switches, or the replacing of ties, rails, etc., in tracks ; the cost 
of inspecting and testing after repairs have been made, such as the testing 
of locomotives after repairs to determine that the repairs have been 
properly made, and the running of repaired locomotives light in order to 
break them in for regular service; incidental costs of repairs, such as the 
construction or removal of false work; cost of relocation of fixed im- 
provements; cost of demolishing retired fixed improvements (except those 
retired and not replaced) and disposing of the wreckage therefrom when 
the property is demolished by or for the account of the carrier ; cost of 
protecting service during the progress of addition and betterment work; 
cost of laying out, cleaning, grading, draining, fencing, mowing, and 
beautifying grounds pertaining to buildings ; repairing sidewalks, driveways, 
and streets within or adjacent to such grounds; cost of removing snow 
from the roofs of buildings (when not removed by those employed in the 
buildings) ; cost of the periodical restoration of seasonal features, such 
as gardens, shrubbery, and lawns; cost of operating hothouses in con- 
nection with the work of beautifying grounds; cost of restoring side- 
walks, driveways, lawns, etc., in grounds after addition and betterment 
work (see general instructions for the classification of investment in road 
and equipment, section 12); and cost of clearing and removing casual 
incumbrances, such as ice, snow, and fallen timber. 

The diflerence between the depreciation upon fixed improvements re- 
tired and replaced and the amount provided for through the depreciation 
accounts, shall be included in the repair accounts when the property is 



xg2 Analysis of Railroad Operations 

retired. Similar adjustments on account of equipment retired shall be in- 
cluded in the accounts for equipment retirements. (See classification of 
investment in road and equipment, general account II, Equipment.) 

Distinct maintenance accounts have been provided for expenses of a 
general character, such as superintendence, stationery and printing, and 
injuries to persons, which, on account of established practice, it is deemed 
advisable to segregate. 

3. Cost of Repairs. — It is intended that the repair accounts of this 
classification shall include the cost of labor, materials and supplies, work- 
train service, floating equipment work service, special machine service, 
contract work, privileges, protection from casualties, and other analogous 
items of expense in connection with the maintenance of the plant used in 
railway service. The several items of cost here referred to are defined as 
follows : 

(a) Cost of labor includes amounts paid for the labor of the carrier’s 
own employees. Except where otherwise specified in the text of the 
accounts, the cost of boarding, traveling, and other incidental expenses of 
employees shall be included in the accounts to which the pay of the 
employees is chargeable. 

(b) Cost of materials and supplies includes the cost of materials and 
supplies, including small tools, at the point of free delivery, plus freight 
charges of foreign lines, and the costs of inspection and loading assumed 
by the carrier; also a proportion of store expenses (see section 16). It 
should not, however, include expenses of transportation over the carrier’s 
line. In calculating the cost of materials used proper allowance shall be 
made for the value of unused portions and of cuttings, turnings, borings, 
etc., and for the value of the material recovered from property repaired 
and from temporary tracks, scaffolding, cofferdams, and other temporary 
structures used in repair work. 

(r) Cost of work-train service includes cost of labor of enginemen, 
trainmen, and enginehouse men, including the wages of engine crews and 
train crews held in readiness for such service; and the cost of fuel and 
other supplies consumed in connection with the operation of work trains. 

(d) Cost of doatmg equipment work service includes cost of labor of 
crews, including wages of crews held in readiness for service ; and the cost 
of fuel and other supplies consumed in connection with the operation of 
floating equipment work service. 

(e) Cost of special machine service includes the cost of labor expended 
and of materials and supplies consumed in operating steam shovels, scrap- 
ers, rail unloaders, ballast unloaders, pile drivers, dredges, ditches, weed 
burners, and other labor-saving machines; also rents paid for use of such 
machines. 

if) Cost of contract work includes amounts paid for -work performed 
under contract by other companies, firms, or individuals and specific ex* 
penses incident to the award of the contract. 



Appendix B 193 

(fir) Cost of privileges includes amounts paid for special privileges, such 
as the temporary use of public property or streets, in connection with the 
repairs of the property of the carrier. (Periodical payments for such 
privileges in connection with permanent use of public property for railway 
operations shall be included in the income accounts.) 

(/?) Cost of protection from casmlties includes expenditures for pro- 
tection against damage by fire, flood, etc., such as payments for discovery 
.or extinguishment of fires, cost of detecting and prosecuting incendiaries, 
expense for witnesses in relation thereto, amounts paid to municipal cor- 
porations and others for fire protection, and other analogous items of 
expense in connection with repair work, but does not include insurance 
premiums paid to assure reimbursement for prospective losses. 

4. Royalties on Appliances.— The royalties for patent rights on me- 
chanical appliances used in repairs of equipment shall be included in the 
cost of the repairs. 

5. Fixed Improvements Retired and Replaced.— The ledger value (less 
salvage and the credit balance in the accrued depreciation account witlt 
respect to the property retired) of fixed improvements retired and re- 
placed with property of like purpose, together with the cost of removing 
the property retired, shall be included in the accounts appropriate for the 
repairs of the property before retirement. (See section 7 of general in- 
structions for the classification of investment in road and equipment) 

6. Distribution of Charges for Property Retired and Replaced,-— In 
case the amount chargeable as operating expenses for property retired and 
replaced, as provided for in section 7 of the general instructions for the 
classification of investment in road and equipment, is relatively large and its 
inclusion would seriously distort the expense accounts for a single year, 
the carrier, if so authorized by the Commission, may charge the amount 
thereof to balance-sheet account No. 726, ^Troperty abandoned chargeable 
to operating expenses,” and distribute it thereafter, in accordance with the 
provisions of that account to the operating expenses of succeeding years. 

If so authorized by the Commission, the carrier may charge to Profit and 
Loss any extraordinarily large item representing the cost of property 
retired and replaced, instead of charging such item to Operating Expenses. 
The carrier shall file with the Commission a statement of the cost and a 
description of the property retired and the reasons which, in its judgment, 
indicate the propriety of charging the cost of such property to Profit 
and Loss. 

7. Charges to Operating Expenses for Fixed Improx’ements Con- 
verted. — In connection with the conversion of fixed improvements, the 
ledger value of property before conversion, plus the cost of conversion, 
less the sum of the estimated value of the property as convertedj the 
amount included in the accrued depreciation account with respect to the 
property thus converted, and the salvage recovered, shall be charged to 
the accounts of this classification appropriate for repairs of the property 



194 Analysis of Railroad Operations 

before conversion. (See general instructions for the classification of in- 
vestment in road and equipment, section 11.) 

8. Depreciation of Fixed Improvements. — Depreciation accounts, in 
which to include uniform monthly charges to cover the depreciation of fixed 
improvements, have been provided for the purpose of creating reserves 
which will meet or reduce the amounts otherwise chargeable, as may be 
appropriate, to operating expense or to profit and loss accounts to cover 

.property retired. Such depreciation charges shall be based in each instance 
upon the percentage of the original cost (estimated if not known), ledger 
value, or purchase price of the property determined to be equitable by 
the carrier’s experience and best sources of information as to the actual 
current loss from depreciation. A statement of the bases used by the 
carrier for computing these charges shall be included in its annual report 
to the Commission. Until further directed the use of depreciation accounts 
for fixed improvements is optional with the carrier. (See balance-sheet 
account No. 775, “Accrued depreciation.— *Road.”) 

9. Joint Facility Accounts. — Accounts thus designated have been pro- 
vided for the joint users of tracks, bridges, yards, wharves, stations, and 
other facilities to indicate the proper accounting for settlements which 
cover income and operating expenses in connection with the use of such 
facilities, and for settlements covering cost of yard service. When the 
compensation for the use of facilities is a fixed amount or is based upon 
a charge per passenger, ton, car, or other unit, it shall be fairly apportioned 
by the operating company among the joint facility operating expense and 
income accounts. The creditor shall show the distribution of these charges 
upon its bills, and such distribution shall be adhered to by the debtor. 

Train service in connection with the line haul of traffic is not con- 
sidered a joint facility operation, and the settlements between carriers cover- 
ing items chargeable to accounts Nos. 392 to 403 shall not be included in 
the joint facility accounts. 

10. Clearing Accounts. — In recognition of the fact that certain ex-, 
penditures incident to the construction and the operation of property are 
not chargeable directly to any particular property investment or expense 
account, clearing accounts have been provided for the purpose of securing 
an equitable distribution of such items to the proper primary accounts. 
(See sections 11 to 17, inclusive.) 

11. Gra,vel and Sand Pits and Quarries.— W hen a gravel or sand pit 
or quarry is opened for operations likely to extend over a long period, an 

account shall be set up designated “Operations of gravel pit at 

or “Operations of quarry at ” as the case may be. To this account 

shall be charged — 

(a) That part of the cost of the land in excess of its estimated value 
after the gravel, sand, or stone has been removed, the amount thus charged 
being concurrently credited to the property account in which the cost of 
the land is included. 



Appetidix B 195 

(fc) Amounts paid for the right to enter upon and remove ballast 
from land not owned by the carrier. 

(c) The cost of sinking test holes. 

(d) The expeness for clearing, stripping, draining, and ditching the land, 
and of moving and changing fences and buildings preparatory to opening 
the pit or quarry. 

(e) The cost, in excess of the estimated salvage value, of rails and 
fastenings used in constructing tracks to and in the gravel pit or quarry* 
the estimated salvage being carried in an appropriate suspense account. 

(/) The cost, in excess of the estimated salvage value, of ties and other 
material, and of labor expended on such tracks. 

(g) The cost of labor and train service employed in producing, quarry- 
ing, and loading ballast, including the cost of operation, repairs, and de- 
preciation of stationary engines, steam shovels, stone crushers, and other 
similar machinery, and the pay and expenses of watchmen. 

(h) The cost of explosives and hand tools, and miscellaneous expenses. 

(«) The cost of installing, operating, and maintaining signals and inter- 
lockers at gravel pits* 

Credit to these accounts shall be made each month to cover the cost of 
ballast material produced during the month. The cost of production shall 
include the expenses directly assignable to the monthly output, plus a pro- 
portion of the expenses not directly assignable, such as cost of land, tracks, 
machinery, and interlockers. This latter amount shall be computed upon 
the basis of the ratio which the monthly output bears to the total estimated 
yardage to be taken from the pit. 

When any portion of the product of such pits or quarries is sold, tlie cost 
thereof shall be credited to this clearing account, and the profit thereon, 
if any, shall be credited to revenue account No. 143, “Miscellaneous.” 

12. PowjER Plant Operations.— The accounting for the expenses of 
maintaining and operating an electric, steam, or other power plant (both 
building and machinery) shall be determined by the purpose for which 
the power produced is used. 

When the power plant is intended and used for producing power solely 
for the carrier's own operations and the cost of operating the plant is 
chargeable to clearing account “Shop expenses,” or to any one specific ac- 
count for operating expenses the expenses of maintenance shall be charged 
to the appropriate maintenance accounts, and the cost of operation to the 
account appropriate according to the use of the power. 

When the power from such a plant is properly chargeable to mote than 
one account, the expenses of maintaining and operating the plant shall be 
included in clearing account “Power plant operations.’* Tite expense of 
maintenance shall be cleared from that account to the appropriate main- 
tenance accounts for operating expenses, The expenses of operation shall 
be apportioned to the appropriate accounts upon the basis of quantity of 
power used for the various purposes. 



196 Analysis of Railroad Operations 

When a part of the power produced by a power plant is sold and the 
remainder is used in the carrier’s own operations, the cost of maintaining 
and operating the plant shall be charged to a clearing account The ex- 
pense of maintenance shall be cleared from that account to the appropriate 
maintenance account in operating expenses. The proportion of the expenses 
of operation assignable to the power sold, on the basis of ratio of quantity 
of power sold to total quantity of power produced, shall be credited to this 
clearing account and charged to account No. 445, ‘‘Producing power sold.” 
The remainder of the cost of operation shall be distributed to the ap- 
propriate expense accounts for the carrier’s own operations, in the manner 
indicated in the preceding paragraphs. 

When power plants are intended and used solely for furnishing power 
to others, the investment therein shall be included in balance sheet account 
No. 70S, “Miscellaneous physical property,” and the operation shall not be 
included in the accounts of this classification. (See general instructions, 
section 4, and income account No. 534, “Expenses of miscellaneous opera- 
tions”) 

13. PowEX Substation Oterations.— The plan outlined for the expenses 
of operating power plants shall be followed in accounting for the opera- 
tions of substations. 

14. Maintaining Transmission and Distribution Systems.*— The ac- 
counting for the maintenance of transmission systems and distribution sys- 
tems shall be in accordance with instructions pertaining to power plant 
operations. 

15. Shop Expenses.— A clearing account entitled “Shop expenses” shall 
be kept, to which shall be charged items of expense at shops, enginehouse, 
repair tracks, and other places at which mechanical work is done, not as- 
signable directly to specific accounts. Such expenses shall be apportioned 
among the various accounts affected. The basis of distribution shall be the 
relative proportion which the total amount of charges to “Shop expenses” 
bears to the total of the directly distributed labor. To avoid monthly 
fluctuations in the ratio of shop expenses to the total of distributed labor, 
carriers are permitted to make the monthly apportionment on the basis 
of a percentage of the distributed labor, provided the shop expense account 
be adjusted and closed out at the end of each year. The expenses assign- 
able to this account are as follows : 

(a) General shop emplcyees,—-T:hQ. pay of general foremen in small 
shops, who exercise direct supervision over all departments unassisted by 
department foremen; the pay of department foremen, assistant department 
foremen, other supervising or directing employees, and their clerks; pay 
of chauffeurs and oilers; pay of sweepers, cleaners, roustabouts, and 
other unskilled laborers employed in general work in and about shops and 
shop grounds; pay of watchmen, gatekeepers, and policemen at shops, 
repair tracks, and other places at which mechanical work is done; pay of 



Appendix B 197 

employees while attending fires or fire drills; and pay of employees while 
making, repairing, or having charge of small shop tools. 

{h) Power , — ^The cost of fuel used in steam and other power plants in 
producing power for shops and for other places at which mechanical work 
is done ; cost of oil, grease, waste, and other material used in the operation 
of such power plants ; pay of stationary engineers, firemen, electricians, coal 
handlers, and other employees engaged in production of power; cost of 
carbon brushes, fuses, lamps, picks, pokers, scuttles, shovels, and other 
small tools and supplies; and cost of water and power purchased. (See 
section 12.) 

(c) Heating , — The cost of fuel and other supplies used for heating shops 
and other places at which mechanical work is done, shop offices, watch- 
men^s and gatekeepers* boxes, and inspector’s shanties; and the pay of 
firemen, coal handlers, and other employees engaged in operating heating 
boilers. (See section 12.) 

id) Lighting . — The cost of electric current, gas, oil, torches, lamp burn- 
erSj lamp chimneys, lamps not permanently attached to buildings, in- 
candescent lamps and carbons, and other material used in lighting shops and 
shop offices, repair tracks, and other places at which mechanical work is 
done, and cost of material used and labor expended in operating electric- 
light plants and repairing electric-light and other lamps at shops. (See 
section 12.) 

(e) Switching locomotives.'-^All expenses, including wages, fuel, and 
supplies, of operating switching locomotives when exclusively assigned to 
switching service at shops. (The expenses of incidental switching at 
shops by locomotives in transportation switching service shall be charged 
to appropriate transportation accounts.) 

(/) Shop supplies.-^Fuel for forge and other shop work; supplies and 
small tools used by mechanics on miscellaneous work and not durable ; 
test-room and laboratory supplies used in connection with shop work; 
lubricating material for shop machinery and tools ; water used at shops and 
shop offices, repair tracks, and other places at which mechanical work is 
done; and other supplies used generally in shop work. 



198 


Analysis of Railroad Operations 


UST OV SUPPLIES AND SMALL TOOLS. 


Acid. 

Adzes. 

Ammonia. 

Auger bits. 

Augers. 

Axes. 

Basins. 

Bath brick. 

Battery brushes. 

Beeswax. 

Bell cord. 

Blucstone. 

Bone, granulated* 

Borax. 

Bottles. 

Braces and bits. 

Brooms. 

Brushes, dust. 

Brushes, file. 

Brushes, oil. 

Brushes, paint. 

Brushes, scrub. 

Brushes, sweeping. 
Brushes, varnish. 

Brushes, wall. 

Brushes, whitewash. 
Brushes, window. 

Buckets. 

Carpenter tools furnished 
apprentices. 

Casehardening compound. 
Cement, belt. 

Chalk. 

Chalk lines. 

Chamois skins. 

Charcoal. 

Chisels. 

Clamps, hand. 

Coal picks. 

Compound for B. S. ham- 
mers. 

Compound for grinding. 
Compound for hydraulic 
jacks. 

Compound for welding. 
Corks. 

Cosmic to prevent ntst. 
Crayon, 

Cups, tin. 

Cushion beaters. 

Dippers. 

Disinfectants. 

Ditching lines. 

Drill bits. 

Drinking cups. 


Drinking glasses. 
Dustpans. 

Emery. 

Emery boxes. 

Emery cloth. 

Emery paper. 

Faucets. 

File cards. 

Files. 

Fire hooks for stationary 
boilers. 

Fire shovels for stationary 
boilera 
Flags. 

Flannel, canton. 

Forks. 

Forks, coke. 

Funnels. 

Gimlets. 

Glue. 

Gluepots. 

Glycerin. 

Graphite. 

Grindstones. 

Ground glass. 

Hack-saw blades. 
Hammers. 

Hammers, babbitt. 

Hand leathers. 

Handies for toola 
Hatchets. 

Hoes. 

Keel. 

Lampblack, 

Lead. 

Lye. 

Mallets. 

Marking brushes. 

Marking pots. 

Measures, liquid. 

Mineral paste. 

Mop bandies. 

Mops, 

Muslin. 

Nippers. 

Oil cans. 

Oilstones. 

Padlocka 
Paint pots. 

Picks. 

Pipe-joint grease. 

Pliers. 

Plumbago. 

Polish. 

Polish, stove. 


Potash. 

Prisms. 

Rakes. 

Rasps. 

Ratchet braces. 

Red lead. 

Resin. 

Rope. 

Rules. 

Sal ammoniac. 

Sand soap. 

Sandpaper. 

Saw blades. 

Saws, hand. 

Scoops. 

Screw drivers. 

Screws. 

Shellac. 

Shovels. 

Slate pencils. 

Slates. 

SledgesL 

Soap. 

Soda. 

Solder. 

Soldering fluid. 

Spelter solder. 

Spigots for oil barrels. 
Spirit-level vials. 

Spirit levels. 

Sponges. 

Sprinkling cans. 

Squares. 

Squirts (lubricating). 
Stencil brushes. 

Tacks. 

Tape lines. 

Tapes, metallic. 

Tool steel for small hand 
tools. 

Tripoli, 

Trucks. 

Twine. 

Washbasins. 

Wheelbarrows. 

Whetstones. 

White lead. 

Whiting. 

Window cloths. 

Wire. 

Wire brushes. 

Wrenches. 

Zinc cakes. 

Zincs. 


(g) Incidental expenses. — Watchmen’s uniforms, clocks, and call boxes; 
traveling expenses connected with the operation of shops and not directly 
chargeable to other accounts; removal of snow and ice from transfer 



Appendix B 199 

tables and shop yards; cleaning of privy vaults; horse keep; cost of ice 
for shops ; and other undistributed shop expenses. 

16. Material Store Expenses. — To a clearing account called “Material 
store expenses” shall be charged expenses in connection with purchasing, 
handling, and storing material in and distributing it from the company’s 
storehouses, including the pay of officers and employees in the purchasing 
and store departments and their traveling office and other expenses; also 
all expenses, including wages, fuel, and supplies, of operating switching 
locomotives when exclusively assigned to the service of switching at ma- 
terial storehouses. (Expenses of incidental switching at material yards 
by locomotives in regular switching service shall be charged to the ap- 
propriate transportation accounts.) The pay and expenses of men employed 
in purchasing or inspecting a single class of material, such as ties, shall 
be added as store expenses to the cost of that particular material. 

The total amount of storehouse expense charged to this account shall 
be so distributed among the accounts to which material has been charged 
that the amounts thus distributed will be, for each account, in proportion 
to the value of the material issued chargeable thereto, except that the 
amount representing the purchasing department expenses shall be appor- 
tioned on the value of the material issued which was purchased by that 
department. To avoid monthly fluctuations in the ratio of store expenses 
to the value of material purchased or issued, carriers may make a monthly 
apportionment on the basis of fair percentage rates, provided the store 
expense accotmt be adjusted and closed out at the end of each year. 

17. Stationery Store Expenses. — clearing account entitled “Stationery 
store expenses” shall be kept, to which shall be charged expenses in con- 
nection with purchasing, handling, and storing stationery, and for dis- 
tributing it from the stationery stores, including the pay of officers and 
employees in the stationery store department and their traveling, office, and 
other expenses. The amounts charged to this account shall be apportioned 
to the accounts to which is charged stationery issued from the store, upon 
the basis of the charges to these accounts for such stationery. To avoid 
monthly fluctuations in the ratio of store expenses to the value of ma- 
terial issued or purchased carriers may make a monthly apportionment on 
the basis of fair percentage rates, provided the stationery store expense 
account be adjusted and closed out at the end of each year. 

18. Insurance. — Provision has been made in each of the general accounts 
for premiums paid and amounts set aside for fire and other insurance. 
Amounts of insurance recovered on account of losses shall be credited to 
the accounts to which the losses are chargeable. 

19. Equalization of Expenses.— For the purpose of equalizing the 
monthly charges for the repairs of fixed improvements and equipment the 
carrier may include each month in the appropriate primary repair accotmts 
a uniform proportion of the amount of authorized estimates of such ex- 
penses for the fiscal or calendar year. In a like manner, the authorized 



200 Analysis of Railroad Operations 

estimates of expenses on account of personal injury or loss and damage 
liability, for stationery and printing, and for advertising may be equalized 
in the monthly accounts for the fiscal or calendar year. If the carrier has 
been unable to carry out its program for repairs and does not adjust its 
accounts to conform to the actual expenditures, it may carry forward the 
balances and treat them as provided in section 20, relating to balances in 
operating reserves. If, on account of claims for personal injury or loss 
and damage being unsettled at the close of the year, the accounts for such 
expenses are not adjusted, the balances carried forward in the operating 
reserve account shall be analyzed as also provided for in section 20 of these 
instructions. 

Charges for stationery and printing, and for advertising, for a fiscal or 
calendar year shall be adjusted to the actual expenses. 

20. Balances in Operating Reserves.— If, at the end of a fiscal year, 
balances remain in operating reserves, the carrier shall indicate in detail 
in a formal report to the Commission the amounts therein, and the con- 
ditions causing the carrying forward of such balances, except as to balances 
applicable to personal injury or loss and damage liability, for which bal- 
ances the carrier shall preserve in its files the details upon which such 
estimates were based. Separate records shall be kept of the operating 
reserve accounts for each year. 

21. SuBPEiMARY Accounts for Water Lines and Electric Divisions. — 
When a carrier operates a water line and desires to set up subprimary 
accounts under the primary accounts for such operations contained in this 
classification, the subprimary accounts shall conform to the accounts pre- 
scribed in the classification of operating expenses of carriers by water. 
When the carrier operates an electric division and desires to set up sub- 
primary accounts under the primary accounts contained in this classifica- 
tion, the subprimary accounts shall conform to the accounts prescribed in 
the classification of operating expenses of electric railways. 

22. Interpretation of Item Lists.— Lists of “items,” “details,” etc., 
have been given as a part of this classification for the purpose of clearly 
indicating the application of the accounting rules in specific cases. The lists 
in every case are to be considered as merely representative and not as 
excluding from any account analogous items which happen to be omitted 
from the list appended. On the other hand, the appearance of an item in 
a list warrants the inclusion of such item in the account concerned only 
when the text of the account also indicates inclusion, inasmuch as the 
same item frequently appears in more than one list— for example, the item 
of blank books under accounts Nos. 276, 334, 358, 410, and 458 — and the 
proper charge in any one instance must be determined by the text of the 
account. 



Appendix B 


aoi 


TEXT PERTAINING TO OPERATING EXPENSE ACCOUNTS 


L MAINTENANCE OF WAY AND STRUCTURES. 

The primary accounts included in this general account are designed 
to show the expenses of maintaining fixed improvements which are 
devoted to railway operations, with the exception of shop machinery, 
power plant machinery, and power substation apparatus, the expenses 
of maintaining which are includible in general account II, Maintenance 
of Equipment. 

The accounts for maintenance of way and structures shall be kept 
in such manner as to show separately, by primary accounts, the ex- 
penses directly assignable to sleeping car operations, water-line opera- 
tions, dining and buffet service, hotels and restaurants, grain elevators, 
stockyards, producing power sold, and other miscellaneous operations. 

201. SUPERINTENDENCE. 

This account shall include : 

Pay of officers.— The pay of officers directly in charge of or en- 
gaged in the maintenance of roadway and structures. 


LIST OF OFFICERS. 

(See special instructions, section 


Vice president. 

Assistant vice president 
General manager. 
Assistant general man- 
ager. 

General superintendent. 
Assistant general superin- 
tendent. 

Chief engineer. 

Engineer. 

Division engineer. 


Bridge engineer. 

Chief agnal engineer. 
Assistant engineers. 
Architect 
Roadmaster. 

Assistant roadmaster. 
Master carpenter. 
Assistant master carpen- 
ter. 

Master mason. 
Superintendent of road- 


22 .) 

way structures. 
Superintendent of scales, 
Inspector of maintenance. 
Building inspector. 
Inspector of roadway 
ston^. 

Supervisor, 

Assistant supervisor. 

Fire chief. 

Fire inspector. 

Sanitary inspector. 


Pay of clerks and attendants.— The pay of clerks and other em- 
ployees in the offices and on the business cars of officers whose 
pay is chargeable to this account. 

list OF EMFLOYFES, 


Chief clerk* 

Draftsmen, 

Qerks, 

Stenographen. 

Transitmen. 


(See special instructions, section 22.) 

levelmen. Messengers, 

Rodmen. Cooks. 

Chainmen. Porters. 

Axmen. 

Janitors. 



202 Analysis of Railroad Operations 

Office and other expenses. — Office expenses and other expenses of 
officers and employees whose pay is chargeable to this account; also 
amounts paid detective agencies and others for investigations in 
connection witli maintenance of way and structures. 

ITEMS OF EXPENSE AND SUPPLIES. 

(See special instructions, section 22.) 

Atlases and maps. Heating. Rent o£ offices. 

Books for office use. Lighting. Repairs of rented offices. 

Business car service. Official train service. Telegraph service. 

Fees and dues in associa- Periodicals and news- Telephone service. 

tions. papers. Traveling expenses. 

Furniture repairs and re- Power. Water and ice. 

newais. Provisions for business 

cars. 


SUPPLIES FOR TECHNICAL ASSISTANTS. 


(See special instructions, section 22.) 


Barometers. 

Magnifiers. 

Slide rules. 

Books and maps. 

Marking chalk. 

Stakes. 

Boxes for materials and 

Oilstones. 

Straightedges. 

instruments. 

Paper, blue-print. 

Tally registers. 

Cameras. 

Parallel rules. 

Tape lines. 

Camp equipage. 

Photographic supplies. 

Tee-squares. 

Chains for surveyors. 

Plane tables. 

Telescopes. 

Compasses. 

Planimeters. 

Thermometera 

Curves, 

Plummets. 

Thumb tacks. 

Drafting boards. 

Protractors. 

Tracing linens. 

Drafting instruments. 

Ranging poles. 

Transits. 

Field glasses. 

Reading glasses. 

Traverse tablea 

Field notebooks. 

Rods for surveyors. 

Trianglea 

Hatchets. 

Scales. 

Tripods. 

Levels. 

Section liners. 

Verniera 

Magnets. 

Sextants. 



Note A. — When employees designated above are engaged on con- 
struction or other work not chargeable to Maintenance of Way and 
Structures, their pay and expenses while thus employed shall be 
charged to the specific work on which engaged. 

Note B. — ^When officers designated above have supervision over more 
than one department, their salaries, the pay of their clerks and 
attendants, and their office and other expenses shall be apportioned 
equally among the departments over which they have supervision. 

Note C. — No part of the pay and expenses of the officers and 
employees designated above shall be charged to other primary accounts 
under Maintenance of Way and Structures. 

Note D. — The cost of stationery for maintenance of way and struc- 
tures offices is chargeable to account No. 276, “Stationery and printing.” 

202. ROADWAY MAINTENANCE. 

This account shall include : 

Care of roadbed.— The cost of repairing roadbed. 



Appetidix B 


203 


ITBHS OP ROADWAY EXPENSE. 

(See special instructions, section 22.) 

Jbiasting rocks. Oiling roadbed. 

Building temporary tracks around slides Removing temporary tracks around dides 

and washouts. and washouts. 

Constructing and cleaning tile ditches, Repairing roadbed damaged by wa^outs. 

open ditches, and drains. Removing dangerous rocks. 

Crowning track ties with retaining earth. Removing slides. 

Filling barrow and cattle pits. Restoring roadbed, cuts fills, and em- 

Keeping tracks clear and repairing sub* bankments to standard width. 

grade in case of washouts. Sloping cuts. 

Landscape gardening along roadway. Sodding roadway. 

Note A. — The cost of drains or sewers laid under tracks shall be 
included in account No. 208, ‘^Bridges, trestles, and culverts.” The 
cost of landscape gardening within the limits of the grounds around 
buildings shall be included in the appropriate repair accounts for 
buildings. 

General cleaning. — The cost of cutting, removing, and disposing 
of brush, grass, and weeds from the right of way; plowing and 
digging fireguards; dressing ballast and cutting sod lines; removing 
miscellaneous scrap, drift, cinders, dirt, and other material from 
right of way and from road and terminal tracks (including tracks at 
stations, engine yards, and car yards) ; and cleaning streets used as 
roadways. 

Note B.—Loading ashes at engine-yard tracks shall be charged to 
the enginehouse expense accounts. 

Watching roadway.-— The cost of extinguishing fires on right of 
way and adjacent thereto, and of walking, watching, and patrolling 
tracks and right of way. 

Note C — ^The cost of watching and patrolling bridges, buildings, 
and miscellaneous property is provided for in accounts specifically 
relating to such property. 

Bank protection.— Cost of protecting banks by repairing retaining 
walls, riprap, piling, piers, dikes, breakwaters, and revetments, and by 
changing the channels of streams to prevent cutting, washing, and 
sliding of embankments. 

Train service. — The cost of work-train service in connection with 
work pertaining to roadway maintenance. 

Track changes. — The cost of roadway work in connection with 
taking up and relocating tracks. 

Other expenses. — ^The cost of roadway work not provided for 
elsewhere, such as official roadway inspection train service and pre- 
miums in connection with roadway maintenance. 

Note D. — Tools and supplies used by repair men and watchmen in 
roadway maintenance service shall be charged to account No, 271, 
“Small tools and supplies.” 

(Note carefully special instructions, sections 2 and 3.) 



204 Analysis of Railroad Operations 

!03. ROADWAY— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of roadway. (See special instructions, section 8.) 

J04. UNDERGROUND POWER TUBES. 

This account shall include the cost of repairing power tubes or 
conduits for underground contacts of electric railways or for under- 
ground cables of cable traction railways. 

(Note carefully special instructions, sections 2 and 3.) 

DETAILS OF UNDERGKOUND CONTACT CONST* UCTION. 

(See S|>ecial instructions, section 22.) 

Concrete work. Manhole frames. Slot rails. 

Drain pipes. Pulleys. Yokes. 

Manhole covera Sheaves. 

Note. — The cost of replacing track rails, other track material, ele- 
tric contact rails, and insulators shall be charged to the accounts 
provided for such expenses and not to this account. 

205. UNDERGROUND POWER TUBES— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of underground power tubes. (See special instructions, 
section 8.) 

206. TUNNELS AND SUBWAYS, 

This account shall include the cost of repairing, ventilating, lighting, 
and watching tunnels and subways for the passage of trains, and the 
cost of special tools and supplies furnished in connection with the 
work. 

(Note carefully special instructions, sections 2 and 3.) 

Note. — The cost of repairs to signals and to roadway and tracks 
in tunnels shall be charged to the appropriate maintenance of way 
accounts and not to this account. 

207. TUNNELS AND SUBWAYS— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of tunnels and subways. (See special instructions, sec- 
tion 8.) 

208. BRIDGES, TRESTLES, AND CULVERTS. 

This account shall include the cost of repairing (including fuel and 
supplies used) and watching bridges, trestles, and culverts, including 
altering and bracing during process of filling, removing old structures 
in connection with the construction of new structures, dredging and 
cleaning water channels for protection, and cleaning culverts. 

The bridges, trestles, and culverts referred to in this account in- 
clude only structures which carry the carrier’s own tracks. 

(Note carefully special instructions, sections 2 and 3.) 



Appendix B 


205 


DETAILS 07 BRZOCB STEVCTUEBS. 


(See special instructions^ section 22.) 


Abutments. 

Bridge signs. 

Cofferdams. 

Concrete and masonry ends for culverts. 
Cribs, 

Decking, including gravel for fire pro> 
tection. 

Dike protection. 

Drainage systems. 

Draw protection. 

Drawbridge engines and machinery. 
False work. 

Guard timbers. 

Ice breakers. 


Painting. 

Pier protection. 

Piers and foundations. 
Pipe culverts. 

Retaining walls. 

Riprap around abutments. 
Riprap at culvert ends. 
Supports, 

Water channels. 
Waterproofing. 

Wing dams. 

Wing walls. 


NoTE.^ — ^When a part or the entire structure of a bridge or trestle 
is converted, by filling, into an earth embankment, the ledger value of 
the structure, or of the portion thereof filled, shall be credited to road 
and equipment account No. 6, '‘Bridges, trestles, and culverts.” In 
case the bridge is used in lieu of a temporary trestle for the purpose 
of filling, the estimated cost of such a temporary trestle shall be 
charged to road and equipment account No. 3, “Grading.” The ledger 
value of the structure, or portion thereof, filled, less the value of the 
salvage and the estimated cost of trestle charged to road and equip- 
ment account No. 3, “Grading,” shall be charged to this account. 

209. BRIDGES, TRESTLES, AND CULVERTS-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of bridges, trestles, and culverts. (See special instruc- 
tions, section 8.) 

210. ELEVATED STRUCTURES. 

This account shall include the cost of repairing elevated structures 
and foundations of elevated railway systems. 

(Note carefully special instructions, sections 2 and 3.) 

211. ELEVATED STRUCTURES— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of elevated structures and foundations of elevated railway 
systems. (See special instructions, section 8.) 

212. TIES. 

This account shall include the cost of cross, switch, bridge, and 
other track ties used in the repairs of tracks. 

(Ndte carefully special instructions, sections 2 and 3.) 

Note A. — ^The cost of labor for unloading, distributing, and putting 
ties in tracks, the cost of work-train service in connection with the 
distribution of the ties laid, and the cost of picking up . and concen- 
trating or disposing of the ti^ released shall be charged to account 
No. 220, “Track laying and surfacing.” 



206 


Analysis of Railroad Operations 


^ Note B. — ^The excess cost of metal ties applied in place of wooden 
ties over the cost at current prices of replacing in kind the wooden 
ties removed shall be charged to road and equipment account No. 8, 
“Ties” 

Note C. — The cost of ties used for repairs of tracks in quarries 
and ballast pits shall be included in the appropriate clearing accounts, 
and of ties used for repairs of tracks on car floats in account No. 
323, “Floating equipment — Repairs.” 

213. TIES-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of ties, (See special instructions, section 8.) 

214. RAILS. 

This account shall include the cost (less salvage) of rails used in 
the repairs of tracks ; also the difference between the cost (at current 
prices at time of removal) of heavy rails removed and the cost of 
lighter rails applied in repairs of tracks. 

(Note carefully special instructions, sections 2 and 3.) 

Note A.— The cost of labor for unloading, distributing, and putting 
rails in tracks, the cost of work-train service in connection with the 
distribution of the rails laid, and the cost of picking up and concen- 
trating the rails released shall be charged to account No. 220, “Track 
laying and surfacing.” 

Note B. — The excess cost of heavier rails or rails of improved 
quality or type applied in repairs of tracks over the cost, at current 
prices, of rails of the weight, type, and quality released shall be 
charged to road and equipment account No. 9, “Rails.” 

Note C. — The cost of rails used for repairs of tracks in quarries 
and ballast pits shall be included in the appropriate clearing accounts, 
and of rails used for repairs of tracks on car floats to account No. 323, 
“Floating equipraent—Repairs.” 

215. RAILS—DEPRECIATION. 

This account shall include charges covering tlie current loss from 
depreciation of rails, (See special instructions, section 8.) 

216. OTHER TRACK MATERIAL. 

This account shall include the cost (less salvage) of all track 
material used in the repairs of tracks, other than ballast, ties, and rails. 

(Note carefully special instructions, sections 2 and 3.) 


ITEMS OF OTHER TRACK MATERIAI.. 


(See special instructions, section 22.) 


Angle bars. 

Anticreepera 
Connecting rods. 

Derails. 

Frog and guard-rail blocking 
Frogs. 

Guard-rail clamps. 

Guard-rail fasteners. 

Guard rails. 

Main rods. 

Nut locks. 

Nuts. 

Offset bars. 


Rail braces. 

Rail chairs. 

Rail clips. 

Rail joints. 

Rail rests. 

Rail shims. 

Rail splices. 

Splice bars. 

Step chairs. 

Switch chairs. 

Switch crossings. 
Switch lamps. 

Switch locks and keys. 


Switch points. 
Switch stands. 
Switch-stand bolts. 
Switch targets. 
Switches. 

Tie plates. 

Tie plugs. 
Tie-rods. 

Track bolts. 

Track insulators. 
Track spikes. 



Appendix B 207 

Note A. — The cost of labor and train service for distributing, un- 
loading, and applying “other track materiar* used, and the cost of 
picking up and concentrating the material released shall be charged 
to account No. 220, “Track laying and surfacing.” 

Note B. — The excess cost of improved or heavier track material 
applied for repairs of tracks, under a definite plan of changing st^d- 
ards, over the cost, at current prices, of material of the same weight 
and quality as that released, shall be charged to road and equipment 
account No. 10, “Other track material.” 

Note C — ^The cost of “other track matpial” used for repairs of 
tracks in quarries and ballast pits shall be included in the^ appropriate 
clearing accounts, and of such track material used for repairs of tracks 
on car floats in account No. 323, “Floating equipment— Repairs.” 

217. OTHER TRACK MATERIAL-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of “other track material.” (See special instructions, sec- 
tion 8.) 

218. BALLAST. 

This account shall include the cost of gravel, stone, slag, cinders, 
sand, and like ballast material used in the repairs of tracks, including 
the cost of work-train service and of unloading the material. (See 
special instructions, section 11.) 

When the ballast taken from a pit is not sufficient to justify the 
opening of a clearing account, the cost of gravel and quarry rights and 
cost of sinking test holes shall be included in this account. 

(Note carefully special instructions, sections 2 and 3.) 

Note A. — The cost of loading cinders at ash pits shall be charged to . 
account No. 388, “Enginehouse expenses — Yard,” or to account No. 
400, “Enginehouse expenses— Train” No charge to cover the value 
of cinders accumulated by the carrier shall be included in this account 

Note B.— The cost of labor putting ballast in tracks shall be in- 
eluded in account No. 220, “Track laying and surfacing.” 

Note C.— The excess cost of ballasting tracks over the cost of re- 
placing in kind to its maximum height and width the ballast previously 
put in the roadbed shall be charged to road and equipment account 
No. 11, “Ballast” 

Note D. — Earth placed to form a crown in the middle of the track is 
not to be considered as ballast. 

Note E. — The cost of ballast used for repairs of temporary tracks, 
such as gravel pit or quarry tracks, shall be included in the appropriate 
clearing accounts, 

219. BALLAST— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of ballast. (See special instructions, section 8.) 

220. TRACK LAYING AND SURFACING. 

This account shall include: 

Applying ballast. — The cost of labor expended in preparing the 
roadbed, and applying ballast for repairs of tracks. 



2 o 8 Analysis of Railroad Operations 

Applying ties. — The cost of labor expended in unloading, distribut- 
ing, and applying ties for repairs of tracks ; in gathering up and dis- 
posing of the ties released ; and in respacing ties. 

Applying sails. — The cost of labor expended in unloading, dis- 
tributing, cutting, slotting, drilling, adzing for, and laying rails for 
repairs of tracks; in gathering up and loading rails released; and in 
adjusting for expansion and contraction of rails. 

■ Applying other track material. — The cost of labor expended in 
unloading, distributing, and applying other track material for repairs 
of tracks; and the cost of gathering up and loading the material 
released. 

Track maintenance. — The cost of labor expended in aligning, sur- 
facing, gauging, and shimming tracks; in tightening track bolts and 
track spikes ; in restoring rails, ties, and ballast in case of washouts, 
derailments, and wrecks ; and in taking up tracks. 

Train service. — The cost of work-train service (except work trains 
distributing ballast material) in connection with work pertaining to 
track laying and surfacing. 

Track changes. — The cost of track work (exclusive of the cost of 
track material) in taking up and relocating tracks. 

Other expenses.— The cost of track laying and surfacing work not 
provided for elsewhere, and expenses, such as repairing and replacing 
rail rests, official track inspection train service, and premiums in 
connection with track repairs. 

(Note carefully special instructions, sections 2 and 3.) 

Note. — ^Tools and supplies used by track repair men and watchmen 
shall be charged to account No. 271, **Small tools and supplies.” 

221. RIGHT-OF-WAY FENCES. 

This account shall include the cost of repairing right-of-way fences 
(including permanent snow and sand fences in lieu of ordinary right- 
of-way fences), farm gates, cattle guards, wing fences, aprons, and 
hedges, except those around stockyards, fuel stations, station and shop 
grounds, and building sites. 

(Note carefully special instructions, sections 2 and 3.) 

222. RIGHT-OF-WAY FENCES— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of right-of-way fences. (See special instructions, section 

a.) 

223. SNOW AND SAND FENCES AND SNOWSHEDS. 

This account shall include the cost of repairing permanent and 
portable snow and sand fences and snowsheds for the protection of 
tracks from snow and sand, including rent of land for placing snow 
and sand fences. 

(Note carefully special instructions, sections 2 and 3.) 



Appendix B 209 

Note A.— The cost of repairing permanent snow and sand fences 
which take the place of right-of-way fences shall be included in 
account No. 221, ‘'Right-of-way fences.'* 

Note B. — The cost of setting up, taking down, and storing portable 
snow and sand fences shall be included in account No. 272, “Removing 
snow, ice, and sand." 

224. SNOW AND SAND FENCES AND SNOWSHEDS— DEPRECIA- 

TION. 

This account shall include charges covering the current loss from 
depreciation of snow and sand fences and snowsheds. (See special 
instructions, section 8.) 

225. CROSSING AND SIGNS. 

This account shall include the cost of repairing farm passes, high- 
way crossings, and crossings of other railways crossing the carrier's 
right of way, except railways crossing at grade; also cost of repair- 
ing track signs. 

(Note carefully special instructions, sections 2 and 3.) 


DETAILS OF GEADE CROSSINGS. 


(See special instructions, section 22.) 


Batteries, with track instruments and 
connections, including battery re- 
newals. 

Crossing gates. 

Crossing signal bells. 

Hose for sprinkling grade crossings. 
Paving. 


Planking. 

Soil crossing drains. 

Watch bouses at crossings. 

Warning signals. 

Water for sprinkling grade crossings. 
Water pipes. 


DETAILS OF OVSEGEADE CEOSSXNCS, 

(See special instructions, section 22.) 

Bridge substructures. Piers, including foundations. 

Bridge superstructures. Ketaining and wing walls, including 

Decking, including roadways. foundations. 

Drainage systems. 


DETAILS OF UNDERGRADE CROSSINGS. 

(See special instructions, section 22.) 

Drainage systems. Roadways and sidewalks. 

Retaining walls, outside of bridge abut- Curbing, 
ments. 


LIST OF SIGNS. 

(See special instructions, section 22.) 

Boundary ngns. Subdivision boards.. 

Mile signs. Tunnel caution signs. 

Monument stone^ ^ Water station signs. 

Overhead-bridge ^ution signs. Water trough si^s^ . 

Section signs. Whistle . signs. 

Slow or stop signs. Yard-limit signs. 



210 


Analysis of Railroad Operations 


Note A. — The cost of repairing shop and station overgrade foot- 
bridges and suWays not public highways shall be included in repairs 
of such buildings. 

Note B. — The cost of repairing a bridge or other structure which 
carries the track of another carrier over the accounting carrier's 
tracks shall be included in this account. The cost of repairing bridges 
or trestles, carrying the carrier's tracks over roads, highways, or 
other railways, shall be charged to account No. 208, “Bridges, trestles, 
and culverts.” 

Note C. — The cost of repairing bridge signs shall be included in 
account No. 208, “Bridges, trestles, and culverts.” 

226. CROSSINGS AND SIGNS-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of crossings and signs. (See special instructions, sec- 
tion 8.) 

227. STATION AND OFFICE BUILDINGS. 

This account shall include the cost of repairing station and office 
buildings, fixtures, and appurtenances (including those for heating 
and lighting), used by the carrier in its operations; also the cost of 
maintaining grounds appurtenant to such buildings. 

(Note carefully special instructions, sections 2 and 3.) 


STATION AND OFPICB ST&VCTURES AND DETAILS. 

(See special instructions, section 22.) 


Baggage rooxos. 

Breakwaters for proteo* 
tion of buildings. 

Buildings and rooms for 
trainmen. 

Buildings on piers. 

Call bells. 

Coal bins. 

Ck>al>transferring machin- 
ery (not on coal and 
ore wharves). 

Coal trestles (not on fuel 
stations). 

Commissariat buildings. 

Drainage and sewer sys- 
tems. 

Dwellings. 

Eating bouses. 

Electric wiring. 

Elevators and machinery. 

Express buildings. 

Fences. 

Fire-engine houses. 

Freight cranes. 

Freight derricks. 

Freight handling machin- 
ery. 

Freight houses. 

Garages. 


Gas-sopply systems. 

Gener^ o€ice buildings. 

Grain cribs. 

Grain elevators. 

Grain warehouses. 

Greenhouses. 

Hay houses. 

Heating plants. 

Hedges. 

Hoisting engines, for 
handling freight. 

Hose houses. 

Ice houses. 

Lighting plants. 

Mail cranes. 

Milk stands. 

OfiUce buildings. 

Ore transferring machin- 
ery (not on coal and 
ore wharves). 

Outhouses. 

Pavement in ground limits 

Platforms, freight. 

Platforms, passenger, in- 
cluding planking be- 
tween tracks. 

Power distribution sys- 
tems, 
interior. 


Reading rooms. 

Rooms for Y. M. C. A, 
Scale houses. 

Sidewalks. 

Stables. 

Station footbridges (not 
highway crossings). 
Station intertrack fences 
Station platforms. 

Station signs. 

Station stairways. 

Station subways (not 
highway crossings). 
Station power houses. 
Stations, freight. 
Stations, passenger. 

Stock pens. 

Storehouses. 

Telegraph offices. 

Telpher systems. 

Track scales. 

Transfer houses. 

Transfer platforms. 
Waiting rooms. 
Warehouses. 

Washrooms. 

Water-supply systems. 


Note. — I ncidental cleaning, including the cost of cleaning snow from 
roofs, when done by station or office employees, shall not be included 
in this account. 



211 


Appendix B 

228 . STATION AND OFFICE BUILDINGS-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of station and office buildings. (See special instructions, 
section 8.) 

229. ROADWAY BUILDINGS. 

This account shall include the cost of repairing roadway shops 
and other roadway buildings, including drainage, water, gas, and 
sewer pipes and their connections, machinery and other apparatus, 
fixtures, and furniture in the buildings; also the cost of maintaining 
the grounds appurtenant to such buildings. 

(Note carefully special instructions, sections 2 and 3.) 


LIST OF XOAXyWAY STUVCTUKBS. 

(See special instructions, section 


Bins for material. 
Blacksmith shops. 
Boarding houses. 
Breakwaters for protec* 
tiott of buildings. 
Carpenter ^ops. 

Dwellings for roadway 
employees. 

Fire-engine houses. 


Frog shops used solely for 
repair of track material. 
Hand-car houses. 

Lumber sheds. 

Offices. 

Outhouses. 

Planing mills. 

Rail shops used solely for 
repairs of track material. 


22 .) 

Repair shops. 

Scrap bins. 

Section dwelling bouses. 
Stables. 

Storehouses. 

Tool houses. 

Watch houses. 


Note A. — The cost of repairing signal and interlocker buildings 
and their appurtenances shall be induded in account No. 249, **Signals 
and interlockers.’’ 

Note B. — Incidental cleaning, induding the cost of cleaning snow 
from roofs, when done by employees regularly working in the build- 
ings, shall not be included in this account. 

230, ROADWAY BUILDINGS-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of roadway buildings. (See special instructions, section 
8 .) 

231. WATER STATIONS. 

This account shall include the cost of repairing water stations, 
fixtures, and appurtenances used by the carrier in its operations, and 
the cost of maintaining the grounds appurtenant to such stations. 

(Note carefully special instructions, sections 2 and 3.) 


WATSR STATION STRVCTURBS ANP PETAILS. 

(See special iustructions, section 22.) 


Boilers. 

Breakwaters for protec- 
tion of buildings. 
Buildings on piers. 
Cisterns. , 

Dams. 

Fences. 

Outhouses. 


Penstocks. 

Pump houses. 
Pumps. 

Purifying plants. 
Reservoirs. 

Settling basins. 
Stationary engines. 
, Steam pipes. 


Tanks and foundations. 
Track tanks. 

Tubs. 

Water cranes. 
Water-pipe lines. 
Water-treating plants, 
Wells. 

WindmUls, 



212 


Analysis of Railroad Operations 

Noie.-— I ncidental cleaning, including the cost of cleaning snow 
from roofs, when done by water station employees, shall not be 
included in this account. 

232. WATER STATIONS— DEPRECIATIONS. 

This account shall include charges covering the current loss from 
depreciation of water stations. (See special instructions, section 8.) 

233. FUEL STATIONS. 

This account shall include the cost of repairing fuel stations, fix- 
tures, and appurtenances used by the carrier in its operations, and 
the cost of maintaining the grounds appurtenant to such stations. 

(Note carefully special instructions, sections 2 and 3.) 


FUEL STATION STEUCTtJRES AND DETAILS. 


(See special instructions, section 22.) 


Breakwaters for protec* 
tion of buildings. 
Buckets. 

Buildings on piers. 

Coal buggies. 

Coal hoists. 

Coal pockets and chutes. 
Dumping machinery. 
Elevating machinery. 


Fences. 

Fuel houses. 
FuePoil columns. 
Fuel-oil plants. 
Fuel-oil pumps. 
Fuel-oil sumps, 
Fuel-oil tanks. 
Fuel platforms. 
Fuel wharves. 


Inclines. 

Outhouses, 

Scales. 

Sheds. 

Stationary engines. 
Tipple cars. 
Weighing apparatus. 
Wood racks. 


Note. — Incidental cleaning, including the cost of cleaning snow 
from roofs, when done by fuel station employees, shall not be included 
in this account. 

234. FUEL STATIONS-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of fuel stations. (See special instructions, section 8.) 

235. SHOPS AND ENGINEHOUSES. 

This account shall include the cost of repairing shop and engine- 
house buildings, fixtures, and appurtenances used by the carrier in 
repairing and preparing equipment, and tlie cost of maintaining the 
grounds appurtenant to su^ buildings. 

(Note carefully special instructions, sections 2 and 3.) 


SHOF AND ENGINEHOUSB STRUCTURES AND DETAILS, 
(See special instructions, section 22.) 


Air-compressor houses. 
Ash pits and pockets. 
Ash plants. 

Bins for material. 
Blacksmith shops. 
Breakwaters for protec- 
tion of htnldings. 
Buildings on piers. 

C^r sheds. 


Car shops. 

Carpenter shops. 

Cinder pits. 

Cinder pockets. 

Drop pits. 

Dry houses. 

Electric-power distribution 
systems within build- 
ings. 


Enginehousea. 

Fire-engine houses. 
Footbridges (not public 
highvirays). 

Foundries. 

Gas-compressor houses. 
Heating plants. 

Hose houses. 

Ice housesw 



Laboratories. 

Lighting plants. 

Lumber sheds. 

Machine risops. 

Material and supply trude 
tracks. 

Motor-crane tracks. 
Offices, shop. 

Oil houses. 

Outhouses. 

Faint shops. 

Pipe lines, air, interior. 
Pipe lines, car-heating. 


Appendix B 

Pipe lines, gas, interior. 
Planing mills. 

Platforms, shop and yard. 
Repair shops. 

Sand houses. 

Scale houses. 

Scrap bins. 

Sidewalks. 

Stables. 

Steam distribution sya* 
terns, interior. 
Storehouses. 

Tanks, gas. 


213 

Tanks, oil. 

Test rooms. 

Tin shops. 

Tool houses. 

Track scales. 

Transfer tables. 
Turntables. 

Upholstering riiops. 
Warehouses. 

Wash rooms. 

Watch houses. 


Note A. — The cost of repairing machinery and other apparatus, 
including special foundations, in shops for maintenance of equipment 
shall be included in account No. 302, “Shop machinery.” 

Note B.—Incidental cleaning, including the cost of cleaning snow 
from roofs, when done by shop employees, shall not be included in 
this account, 

236. SHOPS AND ENGINEHOUSES-^DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of shops and enginehouses. (See special instructions, 
section 8.) 

237. GRAIN ELEVATORS. 

This account shall include the cost of repairing structures for the 
transfer, treatment, and storage of grain, including conveyors, ma- 
chinery and fixtures; also the cost of maintaining the grounds ap- 
purtenant to such buildings. 

The buildings referred to in this account are large elevators in 
which a regular grain business is handled or grain is stored for 
various owners. 

(Note carefully special instructions, sections 2 and 3.) 

Note ^ A.— Small storage elevators at way stations, where the 
freight is received for shipment, etc., are classed as station buildings. 

Note B. — ^Incidental cleaning, including the cost of cleaning snow 
from roofs, when done by grain elevator employees shall not be 
included in this account. 

238. GRAIN ELEVATORS-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of grain elevators. (See special instructions, section 8.) 

239. STORAGE WAREHOUSES. 

This account shall include the cost of repairing storage warehouses, 
including machinery and fixtures therein; also the cost of maintaining 
the grounds appurtenant to such warehouses. 

The buildings referred to herein are not the ordinary freight ware- 
houses or stations where freight is received for shipment, etc., but 
are warehouses in which merchandise is stored and whi* -ie carrier 
operates as stor^ warehouses. 

(Note carefully special instructions, sections 2 and 3.) 



114 Analysis of Railroad Operations 

Note.-— Incidental cleaning, including the cost of cleaning snow 
from roofs, when done by storage warehouse employees, shall not 
be included in this account. 

:40. STORAGE WAREHOUSES— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of storage warehouses. (See special instructions, sec- 
tion 8.) 

»41. WHARVES AND DOCKS. 

This account shall include the cost of repairing wharves located 
at marine, lake, or river docks; dredging waterways to approaches 
and around such structures, including removal of dredged-out ma- 
terial; and cutting ice in and around docks and wharves to prevent 
damage; also cost of repairs of cribwork, racks, or caissons for 
preserving the depth of water in docks ; and cost of repairs of guards, 
piling, and other protection against damage by drift or ice. 

(Note carefully special instructions, sections 2 and 3.) 


DETAILS OF WHARVES AND DOCKS. 

(See special instructions, section 22.) 

Bridge pontoons. Dry docks. Ferry riips. 

Bulkheads. Ferry-bridge machinery. Jetties and inclines. 

Caissons. Ferry bridges. Transfer-bridge machinery. 

Cribwork. Ferry racks. Transfer bridges. 

Note A. — The cost of repairing buildings, tracks, and machinery 
(not bridge machinery) on wharves and piers shall be charged to the 
appropriate expense accounts. 

Note B. — The cost of repairing coal and ore wharves shall be 
charged to account No. 243, “Coal and ore wharves.” 

Note C. — Incidental cleaning, when done by regular wharf em- 
ployees, shall not be included in this account. 

242. WHARVES AND DOCKS— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of wharves and docks. (See special instructions, section 
B.) 

243. COAL AND ORE WHARVES. 

This account shall include the cost of repairing wharves and docks, 
including the cost of repairing conveyors, machinery, and fixtures 
for the transfer, treatment, blending, or storage of coal or ore. 

(Note carefully special instructions, sections 2 and 3.) 

Note A. — The structures referred to in this account do not include 
small transfer or storage trestles at stations where coal is stored or 
delivered, such trestles being classed as station buildings. 

Note B. — Incidental cleaning, including the cost of cleaning snow 
from roofs, when done by coal and ore wharf employees, shall not be 
included in this account 



2X5 


Appendix B 

244. COAL AND ORE WHARVES— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of coal and ore wharves, (See special instructions, sec- 
tion 8.) 

245. GAS PRODUCING PLANTS, 

This account shall include the cost of repairing gas producing and 
gas compressing plants, including the machinery and appliances in such 
plants; also the cost of maintaining the grounds appurtenant to such 
plants. 

(Note carefully special instructions, sections 2 and 3.) 

Note. — Incidental cleaning, including the cost of cleaning snow 
from roofs, when done by employees of the gas producing plant, shall 
not be included in this account. 

246. GAS PRODUCING PLANTS— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of gas producing plants and gas compressing plants, (See 
special instructions, section 8.) 

247. TELEGRAPH AND TELEPHONE LINES. 

This account shall include : 

Telegraph. — The cost of repairs of telegraph outside plant and 
terminal equipment for which the carrier is responsible, including the 
cost of work-train service and of special tools provided for the work. 

Telephone. — The cost of repairs of telephone outside plant and 
terminal equipment for which the carrier is responsible, including the 
cost of work-train service and of special tools provided for the work. 

(Note carefully special instructions, sections 2 and 3.) 


DETAILS OF TELEGRAPH AND TELEPHONE TERMINAL EQUIPMENT. 
(See Special instructions, section 22.) . 


Batteries, 

Cables and wires, interior. 
Conduits, interior. 

Connecting wires. 
Current-controlling instruments. 
Electric generators and motors. 
Electric meters. 

Engines, stationary. 


Fuses and mechanical protectors. 
Rectifiers. 

Rheostats. 

Sending and receiving instruments. 
Switchboards. 

Testing outfits. 

Transformers. 


DETAILS OF TELEGRAPH AND TELEPHONE OUTSIDE PLANT. 

(See special instructions, section 22.) 


Aerial attachments. 

Braces. 

Brackets. 

Cable boxes and appurtenances. 
Cables and wire, aerial. 
Conduits and appurtenances. 
Cross arma 
Guy stuba 


Guy wires. 

Insulators, 

Polea 

Submarine cables and connectiona . 

Telephone pole boxea 

Towers, 

Underground cables and connectiona 



2i 6 Analysis of Railroad Operations 

Note.— The salaries, rent, other office expenses, and traveling ex- 
penses of superintendents of telegraph and telephone, their as- 
sistants, clerks, and attendants, when engaged both in maintaining 
and operating telegraph and telephone lines, shall be apportioned 
equally between this account and account No. 407, “Telegraph and 
telephone operation.” 

248. TELEGRAPH AND TELEPHONE LINES— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of telegraph and telephone lines. (See special instructions, 
section 8.) 

249. SIGNALS AND INTERLOCKERS. 

This account shall include the cost of repairing signals and inter- 
lockers governing the movement of trains, including salaries, rent, and 
other office expenses, and the traveling expenses of division signal 
engineers, signal supervisors, their assistants, clerks, and attendants; 
also the cost of special tools furnished for such work. 

(Note carefully special instructions, sections 2 and 2.) 


DSTAILS OF SIGNAU AND INTSFLOCKEItS. 
(See special instructions, section 22.) 


Air compressors. 

Batteries. 

Boilera 

Distant signals. 

Dynamos. 

Engines, stationary. 

Gates at crossings of other railroads. 
Home signals. 

Interlocker buildings. 

Interlocker machinery. 

Interlocker mechanism. 

Levers. 

Power transmission lines. 

Rail bonds, 

Raiiway'Crossing agnals. 

Relays. 


Semaphores. 

Signal and switch levers. 

Signal arma 
Signal bladea 
Signal bridgea 
Signal buildings. 

Signal lamp brackets and connection 
Signal lampa 
Signal . machinery. 

Signal poles and foundationa 
Signal pulleys and foundations. 

Special appliances. 

Station signals. 

Train-order signals. 

Wiring, 


Note. — The cost of repairing track material, such as switches, 
special track fastenings, split rails, and frogs used in connection with 
interlockers, shall be charged to account No. 216, “Other track 
material,” 

250. SIGNALS AND INTERLOCKERS— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of signals and interlockers. (See special instructions, 
section 8.) 

251. POWER PLANT DAMS, CANALS, AND PIPE LINES. 

This account shall include the cost of repairing dams, canals, and 
pipe lines and accessories devoted to the utilization of water power 
for the operation of trains and cars, and to furnish power, heat, and 
light for general purposes. 

(Note carefully special instructions, sections 2 and 3.) 



217 


Appendix B 

DETAIX^ OF DAMS, CANAL, AND FIFE LINES. 

(See special instructions, section 22.) 

Aqueducts. Gates. Roadways, 

Bridges. Grids. Sluices. 

Fences, Inlet valves. Valves, 

Footbridges. Penstocks. Viaducts. 

Fore bays. Reservoirs. Walls. 

252. POWER PLANT DAMS, CANALS, AND PIPE LINES— DE- 

PRECIATION. 

This account shall include charges covering the current loss from 
depreciation of power plant dams, canals, and pipe lines. (See special 
instructions, section 8.) 

253. POWER PLANT BUILDINGS. 

This account shall include the cost of repairing the buildings of 
power plants which furnish power for the operation of trains and 
cars, and furnish power, heat, and light for general purposes, including 
distinct power plant buildings at shops; drainage, water, and sewer 
pipes and their connections; miscellaneous furniture and fixtures; 
and the cost of maintaining the grounds appurtenant to such buildings. 

(Note carefully special instructions, sections 2 and 3.) 

Note A. — ^The cost of repairing machinery and other apparatus in 
general power plants shall be included in account No. 304, ‘Tower 
plant machinery.” 

Note B. — Incidental cleaning, including the cost of cleaning snow 
from roofs, when done by power plant employees, shall not be in- 
cluded in this account. 

254. POWER PLANT BUILDINGS— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of power plant buildings. (See special instructions, sec- 
tion 8.) 

255. POWER SUBSTATION BUILDINGS. 

This account shall include the cost of repairing buildmgs of power 
substations, including storage-battery stations, used to transform power 
for the operation of trains and cars, and to furnish power, heat, and 
light for general purposes ; drainage, water, and sewer pipes and their 
connections; fixtures, including wiring for lighting and heating; and 
miscellaneous furniture and fixtures ; also the cost of maintaining the 
grounds appurtenant to such buildings. 

(Note carefully special instructions, sections 2 and 3.) 

Note A. — ^The cost of repairii^ substation apparatus for transform- 
ing or storing power in power substations shall be included in account 
No. 306, “Power substation apparatus.” 

Note B. — Incidental cleaning, including the cost of cleaning $now 
from roofs, when done by substation employees, shall not be included 
in this account. 

*256. POWER SUBSTATION BUILDINGS-DEPREQATIOK 

This account shall include charges covering the curr^t loss from 
depreciation of power substation buildings. (See spedal instructions, 
section &) 



2i8 Analysis of Railroad Operations 

257. POWER TRANSMISSION SYSTEMS. 

This account shall include the cost of repairing systems for trans- 
mitting high-tension power from power houses to the point where 
transformed for use, including the cost of work-train service and 
special tools furnished for such work. 

(Note carefully special instructions, sections 2 and 3.) 

DETAILS OF POWER TRAKSMISSXOK SYSTEMS. 

(See special instructions, section 22.) 

Cables. Span wires. 

Cut-outs (not at power houses and sub- Switchboards (not at power houses and 
stations). substations). 

Feed wires. Transformers (not at power houses and 

Guard wires. substations). 

Insulators and connections. 

« 

Note A. — The cost of repairing track material, such as insulated 
rail splices used in connection with transmission systems shall be 
charged to account No. 216, “Other track material/’ 

Note B. — When the electric current generated or received is changed 
by means of (a) rotary converters, {b) motor generator sets, or (c) 
static transformers (substation apparatus), that portion of the line 
or outside conductor system carrying current other than the operating 
kind or voltage shall be classed as transmission system. When the 
electric current is generated or received and used substantially un- 
changed in voltage and kind, the line or outside conductor system, 
including any feeders, trolley wires, booster circuits, and supple- 
mentary return, shall be classed wholly as distribution system. Tie 
lines between generating stations and substations should follow the 
same rule as other lines. 

258. POWER TRANSMISSION SYSTEMS— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of power transmission lines. (See special instructions, 
section 8.) 

259. POWER DISTRIBUTION SYSTEMS. 

This account shall include the cost of repairing electric distribution 
systems, whether overhead, surface, or underground, for conveying 
low-tension power for propelling trains and cars, and for power, heat, 
light, and general purposes. 

(Note carefully special instructions, sections 2 and 3.) 

DETAILS OF POWER DISTRIBUTION SYSTEMS. 

(See special instructions, section 22.) 

Compressed-air pipe lines. Fail insulating devices. 

Cut-outs (not at power bouses and sub- Span wires. 

stations). Steam pipe lines. 

Feed wires. Switchboards (not at power houses and 

Guard wires. substations). 

Insulators and connections. Third rail. 

Overhead trolley wires. Third-rail braces. 

Rail bond plugs. Third-rail insulation and protection. 

Rail bonds. Third-rail supports. 



Appendix B 219 

Note A.---The cost of repairing and replacing track material, such as 
insulated rail splices, used in connection with electric distribution sys« 
terns, shall be charged to account No. 216, ‘‘Other track material.” 

Note B. — The cost of repairing that portion of distribution systems 
located in shop buildings and station and office buildings shall be 
included in the cost of repairing the buildings. The cost of repairing 
distribution systems in plants used exclusively for operating signals 
and interlockers shall be included in account No. 249, "Signals and 
interlockers.’* 

Note C. — When the electric current generated or received is changed 
by means of (a) rotary converters, (b) motor generator sets, or 
(c) static transformers (substation apparatus), that portion of the 
line or outside conductor system carrying current other than the 
operating kind or voltage shall be classed as transmission system. 
When the electric current is generated or received and used sub- 
stantially unchanged in voltage and kind, the line or outside con- 
ductor system, including any feeders, trolley wires, booster circuits, 
and supplementary return, shall be classed wholly as distribution sys- 
tem. Tie lines between generating stations and substations should 
follow the same rule as other lines. 

260. POWER DISTRIBUTION SYSTEMS— DEPRECIATION. 

This account shall include charges covering the current loss from 

' depreciation of power distribution systems. (See special instructions, 
section 8.) 

261. POWER LINE POLES AND FIXTURES. 

This account shall include the cost of repairing and replacing electric 
line poles, cross arms, and insulating pins; brackets and other pole 
fixtures; and braces and other supports for holding poles in position; 
also the cost of repairing structures primarily for supporting the 
overhead electric construction. 

(Note carefully special instructions, sections 2 and 3.) 

262. POWER LINE POLES AND FIXTURES— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of power line poles and fixtures. (See special instruc- 
tions, section 8.) 

263. UNDERGROUND CONDUITS. 

This account shall include the cost of repairing conduits required 
for underground electric wires and cables of electric railway con- 
struction, including manholes, sewer connections, sewer traps, and all 
other material necessary for the maintenance of the conduit system. 

(Note carefully special instructions, sections 2 and 3.) 

264; UNDERGROUND CONDUITS— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of underground conduits. (See special instructions, sec- 
tion 8.) 



220 Analysis of Railroad Operations 

265. MISCELLANEOUS STRUCTURES. 

This account shall include the cost of repairing permanent struc- 
tures, not provided for elsewhere, including the cost of repairing all 
furniture and fixtures to equip them for use. It shall also include 
the cost of maintenance of the grounds appurtenant to such structures. 

(Note carefully special instructions, sections 2 and 3.) 

Note A. — When separable the cost of maintaining structures which 
are rented to other companies or individuals shall be charged to the 
income account in which is included the rent received for use of the 
structures. 

Note B. — ^Incidental cleaning, including the cost of cleaning snow 
from roofs, when done by employees regularly working in miscel- 
laneous buildings, shall not be included in this account. 

266. MISCELLANEOUS STRUCTURES—DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of miscellaneous structures. (See special instructions, 
section 8.) 

267. PAVING. 

This account shall include the cost of repairing paving about tracks 
in public highways and streets through which the carrier’s tracks 
are laid. 

(Note carefully special instructions, sections 2 and 3.) 

NoTE.—The cost of repairing paving upon the carrier’s lands, within 
the grounds of buildings or other structures, shall be included in the 
accounts provided for the repairs of the structures, and the cost of 
repairing paving upon the carrier's right of way at crossings in account 
No. 225, ‘‘Crossings and signs.” 

268. PAVIN(>-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of paving. (See special instructions, section 8.) 

269. ROADWAY MACHINES. 

This account shall include the cost of repairing roadway machines 
which are used for the repairs of roadway and structures. 

(Note carefully special instructions, sections 2 and 3.) 


LIST OF ROADWAY MACHINES. 

(See special instructions, section 22.) 


Boilers, portable. 

Cars, hand. 

Cars, lever. 

Cars, motor inspection. 
Cars, push. 

Cars (small), crane, for 
and general use. 
Concrete mixers. 

Ditching machines. 
Dredging machines. 
Engines, portable. 


Grading outfits. 
Hydraulic outfits. 
Jacks, hydraulic. 
Log loaders. 

Pile drivers. 

supply yards Plows, unloading. 

Rail unloaders. 
Rock crushers. 
Steam rollers. 
Timber trucks. 
Velocipedes. 



221 


Appendix B 

Note A. — The cost of repairing machines in the maintenance of 
equipment shops shall be included in account No. 302, “Shop ma- 
chinery,” as provided for therein. 

Note B. — The cost of repairing roadway machines, such as pile 
drivers, log loaders, hoisting engines, and concrete mixers, when 
permanently mounted for movement on carrier’s tracks, shall be in- 
cluded in account No. 326, “Work equipment — Repairs.” 

270. ROADWAY MACHINES-DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of roadway machines. (See special instructions, sections.) 

271. SMALL TOOLS AND SUPPLIES. 

This account shall include: 

Roadway and track tools.— The cost of roadway tools (except 
special tools provided for elsewhere), including the cost of repairing 
such tools. 

(Note carefully special instructions, sections 2 and 3.) 


LIST OF ROADWAY AMO TRACS TOOLS. 

(See special iastructionSL section 22.) 


Adzes. 

Anvils. 

Augers. 

Axes. 

Ballast forks. 

Bars, daw. 

Bars, crow. 

Bars, lining. 

Bars, pinch. 

Bars, raising. 

Bars, tamping. 

Braces and bits. 
Brooms. 

Brush hooka. 

Cable stretchers. 
Cables. 

Cans, oil. 

Cans, water. 

Cant hooks. 

Chains. 

Chisels, track. 
Chisels, wood. 
Curbing hooks. 
Dippers. 

Drawing knives. 

Drill bits. 

Drills (portable). 
Flags, signal. 
Furnaces (portable). 
Grindstones. 


Hammers, napping. 
Hammers, paving. 
Hammers, spiking. 
Handles for tools. 
Hatchets. 

Hoes, 

Jack levers. 

Jacks, ratchet. 

Jacks, screw. 

Jacks, track. 

Kegs, water. 

Ladders. 

Lanterns and fixtures. 
Lawn mowera 
Levela 

Lines for ditching. 

Ntppera 

Oilstonea 

Padlocka 

Pails, water. 

Faint brushea 
Picka day. 

Picka tamping. 

Pike poles. 

Post'hole diggera 
Post-hole tampera 
Punchea 
Rail bendera 
Rail tonga 
Rakea 


Rope. 

Saws, crosscut. 

Saws, hand. 

Scrap boxea 
Scythes, 

Shovela 

Sickles. 

Sledgea 

Spades. 

Spike maula 
Spike pullera 
Spot boards. 

Squarea 

Straightening machinea 
Tape linea 

Thermometers for laying 
rail. 

Tonga 
Tool boxea 
Torchea 
Track gaugea 
Track levels. 

Vises. 

Weed spuda 
Wbeelbarrowa 
Whetstonea 
Wood malleta 
Wrenches, monkey. 
Wrcnchea track* 



222 


Anatysis of Railroad Operations 

Roadway and track suppues. — The cost of supplies consumed in 
connection with the operation of roadway machines while used in 
repairs of roadway and tracks; and cost of supplies used by track- 
walkers, track watchmen, and roadway and track repair men. 

ITEMS OF ROADWAY SUPPLIES. 

(See special instructions, section 22.) 

Alcohol for hydraulic jacks. 

Fuel for heating tool and other section houses. 

Fuel for portable forges used in roadway and track work. 

Gasoline for motor cars. 

Oatmeal and ice for drinking water used by roadway and track repair men. 

Oil and waste for hand cars, lever cars, motor inspection cars, and push cars. 
Oil and wicks for lanterns used by trackwalkers, track watchmen, and roadway 
and track repair men. 

Oil and wicks for lighting tool and other section houses. 

Torpedoes used by trackwalkers, track watchmen, and roadway and track repair 
men. 

Water for section houses. 

272. REMOVING SNOW, ICE, AND SAND. 

This account shall include the cost of keeping track and roadway 
clear of snow, ice, and sand. 

It shall include cost of preventing accumulation, such as the cost 
of distributing, setting up, inspecting, taking down, and regathering 
portable snow and sand fences; and cost of tools furnished for the 
purpose; also cost of storing fences. 

It shall include cost of removing accumulations of snow, ice, and 
sand, cost of snow-plow and flanger service, and of work-train service ; 
cost of applying and removing dangers from locomotives and cars, 
and of slatting pilots; cost of salt to keep switches clear; and cost of 
meals and lodging for men employed in removal service. 

(Note carefully special instructions, sections 2 and 3.) 

273. ASSESSMENTS FOR PUBLIC IMPROVEMENTS. 

This account shall include the carrier’s proportion of the cost of 
repairing public improvements, such as sewers, curbs, gutters, pave- 
ment and sidewalks, including costs of such repairs made under 
Government regulations by the carrier’s own employees. 

(Note carefully special instructions, sections 2 and 3.) 

Note.-— The cost of repairs, required by Government authority, to 
paving between rails and adjacent to tracks laid through public high- 
ways shall be included in account No. 267, “Paving.” 



223 


Appendix B 

274. INJURIES TO PERSONS. 

This account shall include expenses on account of injuries to per- 
sons which occur directly in connection with the maintenance of way 
and structures, including injuries occurring in connection with the 
operation of work trains in such service, and injuries caused by de- 
fective highways within the right of way. 

It shall also include expenses on account of injuries to employees 
incurred while demolishing structures, the maintenance of which would 
be chargeable to Maintenance of Way and Structures; services of 
employees and others called in consultation in connection with claim 
adjustments; pay and expenses of employees w^hile engaged as wit- 
nesses at inquests and lawsuits; and a suitable proportion of dona- 
tions made to hospitals. 


ITEMS or EXPENSE. 

(See special instructions, section 22.) 

Artificial limbs. Medical and surgical services. 

Carriage fees. Medical and surgical supplies. 

Claim adjusters* and clerks’ services. Notarial fees. 

Claim adjusters* olfice expenses. Nursing. 

Compensation for injuries or death. Railway transportation. 

Final Judgments, including plaintiff’s Undertakers* services. 

court costs. Undertakers* supplies. 

Funeral expenses. Witnesses* fees and expenses at inquests 

Hospital attendance. and lawsuits. 


Note A. — Expenses incident to personal injury suits, not otherwise 
provided for, shall be included in account No. 454, “Law expenses.’* 

Note B, — Amounts donated by a carrier to hospitals shall be dis- 
tributed, 25 per cent to account No. 274, “Injuries to persons”; 25 
per cent to account No. 332, “injuries to persons”; and 50 per cent to 
account No. 420, “Injuries to persons.” 

Note C.— The pay, office rent, office expenses, and other expenses 
of claim adjusters, claim clerks and others in charge of or engaged 
in connection with claim cases, when not assignable to a distinct class 
of claims, shall be apportioned equally among the several classes of 
claims over which they have jurisdiction or in connection with which 
they are engaged. 

275. INSURANCE. 

This account shall include premiums, except reinsurance premiums, 
for insuring the carrier against loss through injuries to persons or 
damage to or destruction or loss of property, whether caused by fire, 
accident, or other cause, when such loss to the carrier would be charge- 
able to Maintenance of W'ay and Structures; also premiums 6n 
fidelity bonds of employees whose pay is chargeable to Maintenance 
of Way and Structures. (See special instructions, section 18.) , 

Note.— T he premiums paid by the carrier to its insurance fund 
shall be credited to an insurance reserve account, to which account 
shall be charged the amount of all claims for injuries to persons 



224 


Analysis of Railroad Operations 

and damages to the property covered by its insurance. To such ac- 
count shall also be charged all reinsurance premiums paid to insurance 
companies, and to it shall be credited all amounts recovered from 
insurance companies in reimbursement for losses under such rein- 
surance. 

276. STATIONERY AND PRINTING. 

This account shall include the cost of stationery and printing used 
in connection with maintenance of way and structures. 


STATZONEXY AKO PRINTING ITEMS. 


(See special instructions, section 22.) 


Adding machines. 
Addfessographa and sup- 
plies. 

Arm rests. 

Binders. 

Blank hooks. 

Blotters. 

Blotting paper. 

Bristol board. 

Calculating machines. 
Calendars. 

Carbon paper. 

Cardboard. 

Cards, blank and printed. 
Circulars. 

Computing tables. 

Copy (impression) books. 
Copying brusbea 
Copying presses. 

Crayons. 

Cross-section books. 
Cross-section paper. 
Cyclostyles. 

Dating stamps and rib- 
bons. 

Dictaphones. 

Dictographs. 

Drawing paper. 
Duplicators. 

Electric pens. 

Envelopes, ‘ 

Erasers, rubber and steel. 
Eyelet punches. 

Eyelets. 

File boxes, paper. 

Forms, blank and printed. 


Glass pens. 

Hectographs. 

Indexes. 

fnk for writing and draw- 
ing. 

Inkstands. 

Invoice hooks. 

Legal cap paper. 

Letter paper. 

Manifold paper. 

Manifold pens. 
Mimeographs. 

Mucilage. 

Mucilage bruriies. 
Neostyles. 

Note paper. 

Notices. 

Numbering stamps. 

Oil paper. 

Paper, 

Paper baskets. 

Paper clips. 

Paper cutters. 

Paper fasteners. 

Paper hies. 

Paper weights. 
Papyrographs, 

Pencil sharpeners. 

Pencils for writing and 
drawing. 

Penholders. 

Penracks. 

Pens for writing and 
drawing. 

Phonographs and records. 
Pins. 


Postage. 

Profile books and paper. 
Punches (not conductor’s 
or baggagemen’s). 
Rubber bands. 

Rubber stamps. 

Rulers. 

Ruling pens. 

Scrapbooks. 

Sealing wax. 

Seals. 

Shears. 

Shipping tags. 

Shorthand notebooks. 
Sponge cups. 

Sponges. 

Stamps, impresrion. 
Stylographs. 

Tablets, blank and 
printed. 

Tape. 

Telegraph blanks. 

Tissue (impression) 
paper. 

Tracing cloth. 

Tracing paper. 

Twine. 

Typewriters and ribbons. 
Wage tables. 
Wastebaskets. 

Water colors. 

Water holders. 

Wrapping paper. 
Wringers for copying 
presses. 


Note. — The cost of dictionaries, periodicals, technical books, etc,, 
shall be included in the appropriate superintendence accounts. 

277. OTHER EXPENSES. 

This account shall include all expenses in connection with main- 
tenance of way and structures not provided for elsewhere. 



225 


Appendix B 

IT£1CS OF EXFFVSt. 

(See special mstructionfl^ section 22.) 

Pay and expenses of maintenance of way employees attending conferences with 

officers in connection with wage disputes. 

Fees paid arbitrators in wage disputes with maintenance of way employees. 
Payments to maintenance of way employees for time absent on account of sick* 

ness, when not compensation for personal injuries. 

Gratuities paid to persona for discovering defective rails, etc. 

278. MAINTAINING JOINT TRACKS, YARDS, AND OTHER 

FACILITIES-DR. 

This account shall include the carrier's proportion of the costs 
incurred by others in maintaining joint tracks, yards, terminals, and 
other facilities. 

NoTE.~The purpose of this account is to show the amounts accruing 
against the carrier for its proportion of the cost of maintaining tracks, 
yards, and other roadway and structure facilities maintained by others 
and in the joint use of which the carrier participates. (See special 
instructions, section 9.) 

279. MAINTAINING JOINT TRACKS, YARDS, AND OTHER 

FACILITIES--CR. 

This account shall include amounts chargeable to others as their pro** 
portions of the cost incurred by the carrier in maintaining joint tracks, 
yards, terminals, and other facilities. 

Note. — ^The purpose of this account is to show the amounts accruing 
in favor of the carrier and against others for their proportions of the 
cost of maintaining tracks, yards, and other roadway and structure 
facilities maintained by the carrier and in the joint use of which, 
others participate. (See special instructions, section 9.) 

11. MAINTENANCE OF EQUIPMENT. 

The primary accounts included in this general account are designed 
to show the expenses of maintaining the carrier's equipment and the 
carrier's expense for the, repairs of other ecjuipment used in its opera- 
tions, also the cost of maintaining the fixed improvements which are 
classified as shop and power plant machinery, and power substation 
apparatus. The repair accounts shall include foreign roads' freight 
charges for transporting the carrier's equipment to shops for repairs 
and for transporting such equipment to the carrier's line after re- 
pairs have been made. No charge shall be made to these accounts 
for transporting equipment in the carrier's transportation service trains 
to shops for repairs or from shops after repairs have been made. 

The accounts for maintenance of equipment shall be kept in such 
manner as to show separately, by primary accounts,, the expenses 
directly assignable to sleeping car operations, water-line operations, 
dining and buffet service, producing power sold, and other miscellanea 
ous operations. 



226 Analysis of Railroad Operations 

301. SUPERINTENDENCE. 

This account shall include: 

Pay of officers. — The pay of officers directly in charge of or en- 
gaged in the maintenance of equipment. 


LIST OF OFFICERS. 


(See special instructions, section 22.) 


Vice president 
Assistant vice president. 

General superintendent of motive power. 
Assistant general superintendent of mo- 
tive power. 

Mechanical superintendent 
Superintendent of motive power. 
Assistant superintendent of motive 
power. 

Mechanical engineer. 

Assistant mechanical engineer. 

Chief chemist 

General equipment inspector. 


Engineer of tests. 

Supervisor of car department. 
Electrical engineer. 

Assistant electrical engineer. 
Chemist and assistant chemist. 
Master car builder. 

Master mechanic. 

General foreman. 

Chief car inspector. 

Inspector of passenger-train cars. 
General car inspector. 

Traveling boiler inspector. 


Pay of clerks and attendants. — The pay of clerks and other 
employees in the offices and on business cars of officers whose pay is 
chargeable to this account. 


LIST OF EMPLOYEES. 


(See special instructions, section 22.) 


Chief motive power clerks. 
Chief clerks. 

Draftsmen. 

Stenographers. 

Motive power clerks. 


Shop clerks. 
Messengers. 
Cooks. 
Porters. 


Office and other expenses. — Office expenses and other expenses 
of officers and employees whose pay is chargeable to this account, and 
amounts paid to detective agencies and others for investigations in 
connection with repairs of equipment 


items op expense and supplies. 


(See special instructions, section 22.) 


Atlases and maps. 

Barometers. 

Books for office use. 

Business car service. 

Drafting instruments. 

Drafting supplies. 

Engineering supplies. 

Fees and dues in technical associations. 
Furniture repairs and renewals. 
Heating, 

Lighting. 


Official train service. 
Periodicals and newspapers. 
Power. 

Provisions for business cars. 
Rent of offices. 

Repair of rented offices. 
Telegraph service. 

Telephone service. 

Traveling expenses. 

Water and ice. 



Appendix B 227 

Note A. — When employees designated above are engaged on con- 
struction or other work not chargeable to Maintenance of Equipment, 
their pay and expenses while thus employed shall be charged to ac- 
counts covering the specific work on which engaged. 

Note B. — When officers designated above have supervision over 
more than one department, their salaries, the pay of their clerks and 
attendants, and their office and other expenses shall be apportioned 
equally among the departments over which they have jurisdiction. 

Note C. — The cost of stationery purchased for maintenance of 
equipment offices is chargeable to account No. 334, "Stationery and 
printing." 

Note D. — The pay of general foremen in small shops, who exercise 
direct supervision over all departments, unassisted by departmental 
foremen, shall be apportioned through clearing account “Shop ex- 
penses." 

302. SHOP MACHINERY. 

This account shall include the cost of repairing machinery and other 
apparatus, including special foundations, in shops and enginehouses. 

(Note carefully special instructions, sections 2 and 3.) 


LIST OF SaOF MACaXNEBiy. 

(See special instructions, section 22.) 


Air compressori. 

Ash conveyors. 

Belting. 

Blowers. 

Boilers for furnishing 
power. 

Boring machines. 

Cars, small motor. 

Cars, push. 

Cranes. 

Drill presses. 

Drilling machines. 

Drop tables. 

Forges. 

Framing machines* 


Furnacea 

Grinding and polishing 
machinea 
Hoists. 

Hydraulic jacka 
Lathes. 

Lifting magnets. 

Metal chimneya 
Milling machines. 

Motora 

Pipe cutting and thread- 
ing machinea 
Planera 

Pneumatic hammers. 


Power machinery, where 
no distinct power plant 
is provided. 

Punchea 

Biveters. 

Saws. 

Shafting. 

Shapers. 

Slotters. 

Stationary engines. 

Steam hammera 
Vises. 

^^Iding machines. 
Woodworking machines. 


Note A. — ^The cost of repairing power plant machinery for shop 
power when located in distinct buildings shall be included in account 
No. 304, “Power plant machinery.” 

Note B. — The cost of repairing boilers used exclusively for heating 
shall be included in the appropriate repair accounts for buildings. 

Note C. — The cost of small tools which are soon worn out, when 
used by mechanics on miscellaneous work, shall be included in clear- 
ing account “Shop expenses," and when used on repairs of equipment 
shall be included in the appropriate accounts for repairs of equipment. 

Note D. — ^The cost of repairing machinery and tools in shops used 
exclusively for maintenance of way and structures shall be included 
in account No. 229, "Roadway builffings." 

303. SHOP MACHINERY-.DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of shop machinery. (See special instructions, section E.) 



228 Analysis of Railroad Operations 

304. POWER PLANT MACHINERY. 

This account shall include the cost of repairing machinery and 
Other apparatus, including special foundations, for generating power 
in power plants used for the operation of trains and cars and to 
furnish power, heat, and light for general purposes. It shall also 
include the cost of repairing machinery and other apparatus for trans- 
forming and storing power, when such apparatus is contained in a 
power plant. 

(Note carefully special instructions, sections 2 and 3.) 


DETAILS OF POWER PLANT MACHINERY. 

(See Special instructions, section 22.) 


Ammeters. 

Batteries. 

Belting. 

Boiler-room appliances 
and tools. 

Boilers and fittings. 
Boosters. 

Cables. 

Circuit breakers. 

Clutches. 

Conductors. 

Cranes. 

Draft machinery. 
Dynamos. 

Economizers. 

Electric-power distribution 
systems, interior. 


Engine-room appliances 
and tools. 

Feed-water heaters. 
Furnaces. 

Generators. 

Globes. 

Hangers. 

Heating apparatus. 
Hoists. 

Insulators. 

Lamps. 

Lighting apparatus. 
Lubricating devices. 
Mechanical stokers. 
Piping. 

Poles. 

Pumps. 

Purifiers. 


Rheostats. 

Sewer connections. 
Shafting. 

Stationary engines. 

Steam distribution sya* 
terns. 

Steam fittings. 
Switchboards. 

Tanks. 

Transformers. 

Turbines. 

Voltmeters. 

Water meters. 

Water wheels. 

Wires from generators or 
transformers to switdi- 
boards. 


Note A. — The cost of repairing power apparatus in shops where no 
distinct plant is provided shall be included in account No. 302, “Shop 
machinery.” 

Note B. — The cost of repairing power apparatus in stations and 
offices used solely for station and office purposes, where no distinct 
plant is provided, shall be included in account No. 227, “Station and 
office buildings.” 

Note C. — ^The cost of repairing power apparatus in plants used 
solely for operating signals and interlockers shall be included in 
account No. 249, “Signals and interlockers.” 


305. POWER PLANT MACHINERY— DEPRECIATION. 

This account shall include charges covering the current loss from 
depreciation of power plant machinery. (See special instructions, sec- 
tion 8.) 

306. POWER SUBSTATION APPARATUS. 

This account shall include the cost of repairing machinery and 
other apparatus, including special foundations, for transforming or 
storing power in power substations used for the operation of trains 
and cars and for power, heat, and light for general purposes. 

(Note carefully special instructions, sections 2 and 3.) 



229 


Appendix B 

DETAILS OF POWER SUBSTATIOK APPARATUS, 

(See special instructions, section 22.) 

Rotary converters. Switchboards. 

Storage batteries. Transformers, 

Note. — ^When machinery and other apparatus for transforming 
and storing power are located in a power plant the cost of repairs 
shall be included in account No. 304, “Power plant machinery.” 

307. POWER SUBSTATION APPARATUS-DEPRECIATION, 

This account shall include charges covering the current loss from 
depreciation of power substation apparatus. (See special instructions, 
section 8.) 

308. STEAM LOCOMOTIVES— REPAIRS. 

This account shall include the cost of repairing transportation 
service steam locomotives and tenders, including all appurtenances^ 
and the cost of small hand tools used in repair work 

This account shall also indude the cost of work-train service for 
the transportation of locomotives without steam to shops for repairs, 
including the pay and expenses of caretakers, and the pay and expenses 
of caretakers of locomotives without steam which are hauled in trans- 
portation service trains to shops for repairs ; also notarial fees in con- 
nection with reports on conditions of locomotives. 

(Note carefully special instructions, sections 2 and 3, and general 
instructions for income, profit and loss, and general balance-sheet 
accounts, section 2.) 

LIST OF AFPURTENANCES TO LOCOMOTIVES, 

(See special instructions, section 22.) 

Air-brake equipment and hose. 

Arm resta. 

Awnings, 

Brake fixtures 
Cab cusbiona. 

Cab. lamps. 

Clocks. 

Coal boards. 

Fire extingui^ing apparatus. 

Gongs, 

Nora A.— The cost of inspecting smokestacks and ash pans of 
locomotives in service shall be included in the appropriate enginehouse 
expense accounts. 

Note B.— The cost of repairing steam locomotives and tenders of 
foreign lines, waybilled as freight, and damaged in transit shall be 
charged to account No. 418, “Loss and damage — Frei^hf*; and the 
cost of repairing steam locomotives and tenders of foreign lines hav- 
ing trackage rights over the carrier's line, damaged by cbfiiisioh, 
wreck, or other cause, for which the carrier is liable, shall be charged 
to account No. 416, “Damage to propertjr,” 

Note C— The cost of running locomotives under steam to shops for 
repairs in connection with transportation service shall be included in 
the cost of the service in connection with which the movement dccurs. 


Head lamps. 

Racking (except for lubricating). 
Pneumatic sanding equipment 
Seat boxes. 

Speed recorders. 

Steam-gauge lamps. 

Steam-heat equipment and hose. 
Storm doora. 

Tool boxes. 

Train-signal equipment and hose. 



230 


Analysis of Railroad Operations 

Note D. — ^The cost of repairing steam locomotives used solely in 
work service in connection with operations shall be included in ac- 
count No. 326, “Work equipment — Repairs.” The cost of repairing 
locomotives on account of construction work shall be included in the 
cost of the work. (See general instructions for the classification of 
investment in road and equipment, section 4c.) 

309. STEAM LOCOMOTIVES-DEPRECIATION. 

This account shall include uniform monthly charges representing the 
depreciation of steam locomotives. These charges shall be based 
upon the percentage of the original cost (estimated if not known), 
ledger value, or purchase price of such equipment determined to be 
equitable from the carrier’s experience and best sources of informa- 
tion as to the average current loss from depreciation. A statement 
of the percentages used by the carrier for computing these charges, 
together with the estimated life of the equipment upon which such 
percentages are based, shall be included in its annual report to the 
Commission, 

Depreciation charges with respect to any locomotive shall cease when 
the difference between the ledger value and the estimated scrap value 
shall have been credited to the accrued depreciation account. 

(See general instructions for income, profit and loss, and general 
balance-sheet accounts, section 2.) 

Note, — ^All charges to this account for depreciation of the carrier’s 
equipment shall be concurrently credited to balance-sheet account No. 
776 “Accrued depreciation — Equipment.” 

310. STEAM LOCOMOTIVES— RETIREMENTS. 

This account shall include amounts necessary to adjust the difference 
between the ledger value (less salvage) of steam locomotives retired 
from service and the amount of accrued depreciation charged on 
account of such retired locomotives to the date of their retirement. 
(See road and equipment account II, Equipment, paragraphs 4 and 5.) 

Note. — Steam locomotives permanently retired from service, but 
held pending disposition, shall be written out of service and carried 
in an appropriate suspense account at an equitable valuation. 

311. OTHER LOCOMOTIVES— REPAIRS. 

This account shall include the cost of repairs of transportation 
service locomotives other than steam locomotives, analogous to 
those set forth for steam locomotives in account No. 308, “Steam 
locomotives — Repairs.” 

(Note carefully special instructions, sections 2 and 3.) 

312. OTHER LOCOMOTIVES-DEPRECIATION, 

This account shall include uniform monthly charges representing the 
depreciation of other than steam locomotives. These charges shall 
be based upon the percentage of the original cost (estimated if not 
known), ledger value, or purchase price of such equipment determined 
to be equitable from the carrier’s experience and best sources of 



Appendix B 23 1 

information as to the average current loss from depreciation. A 
statement of the percentages used by the carrier for computing these 
charges, together with the estimated life of the equipment upon 
which such percentages are based, shall be included in its annual re- 
port to the Commission. 

Depreciation charges with respect to any locomotive shall cease 
when the difference between the ledger value and the estimated scrap 
value shall have been credited to the accrued depreciation account. 

Note. — All charges to this account for depreciation of the carrier’s 
equipment shall be concurrently credited to balance-sheet account No. 
776, “Accrued depreciation— Equipment.” 

313. OTHER LOCOMOTIVES— RETIREMENTS. 

This account shall include amounts necessary to adjust the difference 
between the ledger value (less salvage) of locomotives other than 
steam locomotives retired from service and the amount of accrued 
depreciation charged on account of such retired locomotives to the 
date of their retirement. (See road and equipment account 11, 
Equipment, paragraphs 4 and 5.) 

Note. — Locomotives permanently retired from service but held 
pending disposition shall be written out of service and carried in an 
appropriate suspense account at an equitable valuation. 

314, FREIGHT-TRAIN CARS-REPAIRS. 

This account shall include the cost of repairing freight- train cars 
and appurtenances, and cost of repairs of the freight car feature 
of motor cars engaged in transportation service; also cost of small 
hand tools used in repairs. This account shall also include the net 
loss sustained on account of the destruction of foreign freight cars 
in the carrier’s transportation service and amounts paid to others for 
repairs of freight cars for which the carrier is liable. 

(Note carefully special instructions, sections 2 and 3, and general 
instructions for income, profit and loss, and general balance-sheet 
accounts, section 2.) 


LIST or mSlGHT-TRAlK CARS, 


(See special instructioas, section 22.) 


Ballast (commercial). 
Beer. 

Box. 

Cabin. 

Choose. 

Charcoal. 

Coal. 

Coke. 

Dump (commercial). 

Flat 

Fruit 

Furniture. 


Gondola. 

Gondola (hopper). 
Gondola (long). 
Gun truclc 
Hay. 

Lime. 

Logging. 

Oil tank. 

Ore. 

Platform. 

Poling. 

Poultiy. 


Produce. 

Rack. 

Refrigerator. 

Stock. 

Tank (in commercial ser* 
vice). 

Water (in commercial 
service). 

Work (in commerdal ser- 
vice). 



232 Analysis of Railroad Operations 

LIST OF APPURTENANCES TO FREIGHT-TRAIN CARS. 

(See special instructions, section 22.) 

Air-brake equipment, in- Heating equipment. Train-signal equipment, 

eluding hose. Ice boxes. including hose. 

Cooking equipment and Lamps and fixtures. Water tanks. 

utensils. Seats. 

Cushions. Speed recorders. 

Note A. — The cost of candles, wicks, lamp chimneys, globes, and 
shades for oil or other lamps in freight-train cars shall be charged 
to account No. 402, “Train supplies and expenses.” 

Note B. — The cost of repairing freight-train cars of foreign lines 
waybilled as freight and damaged in transit shall be charged to ac- 
count No. 418, ‘‘Loss and damage— Freight”; and the cost of repairing 
freight-train cars of foreign lines having trackage rights over the 
carrier*s line, when damaged by collision, wreck, or other cause, for 
which the carrier is liable, shall be charged to account No. 416, 
"Damage to property.” 

315. FREIGHT-TRAIN CARS-DEPRECIATION. 

This account shall include uniform monthly charges representing the 
depreciation of freight-train cars. These charges shall be based upon 
the percentage of the original cost (estimated if not known), ledger 
value, or purchase price of such equipment determined to be equitable 
from the carrier’s experience and best sources of information as to 
the average current loss from depreciation. A statement of^jfhe per- 
centages used by the carrier for computing these charges, together with 
the estimated life of the equipment upon which such percentages are 
based, shall be included in its annual report to the Commission, 

Depreciation charges with respect to any freight-train car shall 
cease when the difference between the ledger value and the estimated 
scrap value shall have been credited to the accrued depreciation account. 

(See general instructions for income, profit and loss, and general 
balance-sheet accounts, section 2.) 

Note, — ^All charges to this account for depreciation of the carrier’s 
equipment shall be concurrently credited to balance-sheet account No. 
776, "Accrued depreciation — Equipment.” 

316. FREIGHT-TRAIN CARS-RETIREMENTS. 

This account shall include amounts necessary to adjust the differ- 
ence between the ledger value (less salvage) of freight-train cars 
retired from service and the amount of accrued depreciation charged 
on account of such retired cars, to the date of their retirement 
(See road and equipment account II, Equipment, paragraphs 4 and 5.) 

Note. — Freight-train cars permanently retired from service, but 
held pending disposition, shall be written 'out of service, and carried 
in an appropriate suspense account at an equitable valuation. 

317. PASSENGER-TRAIN CARS— REPAIRS. 

This account shall include the cost of repairing passehger**ttaui 



Appendix B 


m 


cars and appurtenances and passenger car features of motor cars used 
in transportation service; small hand tools used in repairs; the net 
loss sustained on account of the destruction of foreign passenger-train 
cars in the carrier’s transportation service, and amounts paid others 
for repairs of passenger-train cars for whidi the carrier is liable. 

(Note carefully special instructions, sections 2 and 3, and general 
instructions for income, profit and loss, and general balance-sheet ac^ 
counts, section 2.) 

LIST OF PASSSNGEB.-TIIA1K CARS. 


(See special instructions, section 22.) 


Baggage. 

Baggage-express. 

Baggage-mail. 

Baggage-mail-express. 

Buffet. 

Caf6. 

Chair. 

Club. 

Colonist 

Combination passenger 
and baggage. 


Dining. 

Express. 

Immigrant. 

Library, 

Mail. 

MUk. 

Observation. 

Parlor. 

Parlor-baggage. 

Passenger. 

Passenger-baggage. 


Passenger-baggage-mail. 

Postal. 

Kefrigerator-express. 

Sleeping. 

Smoking. 

Tourist 


LIST OF APFITRTEKANCKS TO PASSENGER-TRAI JT CARS, 

(See special instruetionst, section 22.) 


Air-brake equipment, in 
eluding hose. 

Bedding. 

Chairs. 

Coat hooka 
Curtains and fixtures 
Cushiona 
Electric bella 
Floor coveringa 
Heating equipment an< 
steam-heat hose. 

Ice boxea 


Ice tanka 

Kitchen equipment and 
utensils. 

Lighting equipment. 

Mail catchera 
Parcel racks. 

Ranges and boilera 
Seats. 

Speed reeordera 
Steam heat hose. 

Table china. 

Table glassware. 


Table linen. 

Table rilver. 

Toilet equipment. 
Train-signal equipment, 
including hosa 
Water tanks. 


Note A, — The cost of candles, wicks, and lamp chimneys, and of 
globes and shades for electric and other lights in passenger-train 
cars shall be charged to account No, 402, ‘Train supplies and ex- 
penses.” 

Note B, — The cost of repairing passenger-train cars of foreign lines, 
which are waybilled as freight and have been damaged in transit, 
shall be charged to account No. 418, “Loss and damage — Freight,” 
and the cost of repairing passenger-train cars of foreign lines having 
trackage rights over the carrier’s line, when damaged by collision, 
wreck, or otherwise, for which the carrier is liable, shall be charged 
to account No. 416, “Damage to property.” 


318. PASSENGER-TRAIN CARS— DEPRECIATION. 

This account shall include uniform monthly charges representing the 
depreciation of passenger-train cars. These charges shall be based 
upon the percentage of the original cost (estimated if not known), 
ledger value, or purchase price of such equipment determined to 
equitable from the carrier’s experience and best sources of inforination 
as to the average current loss from depreciation, A statement of 



234 Analysis of Railroad Operations 

the percentages used by the carrier for computing these charges, 
together with the estimated life of the equipment upon which such 
percentages are based, shall be included in its annual report to the 
Commission. 

Depreciation charges with respect to any passenger-train car shall 
cease when the difference between the ledger value and the estimated 
scrap value shall have been credited to the accrued depreciation ac- 
count. 

(See general instructions for income, profit and loss, and general 
balance-sheet accounts, section 2.) 

Note. — All charges to this account for depreciation of the carrier’s 
equipment shall be concurrently credited to balance-sheet account No. 
776 , “Accrued depreciation — Equipment.” 

319. PASSENGER-TRAIN CARS— RETIREMENTS. 

The account shall include amounts necessary to adjust the difference 
between the ledger value (less salvage) of passenger-train cars retired 
from service and the amount of accrued depreciation charged on ac- 
count of such retired cars to the date of their retirement. (See road 
and equipment account II, Equipment, paragraphs 4 and 5.) 

Note. — Passenger-train cars permanently retired from service, but 
held pending disposition, shall be written out of service and carried 
in an appropriate suspense account at an equitable valuation. 

320. MOTOR EQUIPMENT OF CARS— REPAIRS. 

This account shall include the cost of repairing motor equipment 
affixed to cars; also cost of small hand tools used in repairs. The 
cars to which this account has reference are distinct from independent 
locomotives used for the propulsion of trains. 

(Note carefully special instructions, sections 2 and 3.) 

ITEMS OF MOTOR EQUIPMENT. 

(See special instructions, section 22.) 

Batteries, storage. Generators. - Switches. 

Circuit breakers. Lightning arrestersL Third-rail contact. 

Controllers. Motors. Trolley poles. 

Engines, intemal-eombus- Overload switches. Trolleys. 

tion. Rheostats. 

321. MOTOR EQUIPMENT OF CARS— DEPRECIATION. 

This account shall include uniform monthly charges representing the 
depreciation of the motor equipment of cars. These charges shall 
be based upon the percentage of the original cost (estimated if not 
known), ledger value, or purchase price of such equipment determined 
to be equitable from the carrier’s experience and best sources of infor- 
mation as to the average current loss from depreciation. A statement 
of the percentages used by the carrier for computing these charges, 
together with the estimated life of the equipment upon which .such 
percentages are based, shall be included in its annual report to the 
Commission. 

Depreciation charges with respect to the motor equipment of cars 
shall cease when the difference between the ledger, value and the 



Appendix B 235 

estimated scrap value shall have been credited to the accrued deprecia- 
tion account. 

Note. — ^All charges to this account for depreciation of the carrier's 
equipment shall be concurrently credited to balance-sheet account No. 
776, “Accrued depreciation— Equipment.” 

322. MOTOR EQUIPMENT OF CARS— RETIREMENTS. 

This account shall include amounts necessary to adjust the difference 
between the ledger value (less salvage) of motor equipment of cars 
retired from service, and the amount of accrued depreciation charged 
on such retired equipment to the date of its retirement. (See road 
and equipment account II, Equipment, paragraphs 4 and 5.) 

Note. — The motor equipment of cars permanently retired from 
service but held pending disposition shall be written out of service 
and carried in an appropriate suspense account at an equitable valua- 
tion, 

323. FLOATING EQUIPMENT— REPAIRS. 

This account shall include the cost of repairing floating equipment 
(other than work equipment), including appurtenances, and cost of 
small hand tools used in repairs. 

The pay and expenses of captains and engineers and of boat em- 
ployees, while engaged on maintenance of floating equipment, shall 
be included in this account. 

(Note carefully special instructions, sections 2 and 3.) 


LIST OF FLOATING EQUIPMENT. 

(See special instructions, section 22.) 

Barges. Lighters. Steamboats. 

Canal boats. Power launches. Steamships. 

Car and other floats. Power lighters. Transfer Wts. 

Ferryboats, Scows. Tugboats. 


LIST OF APFUETSNANCES, TOOL EQmPMBNT, ANP PVENXTUEB. 


(See special instructions, section 22.) 


Anchors. 

Axes. 

Barometers. 

Beds and bedding. 
Binnacle lamps. 

Blocks and tackle. 

Boilers and foundations. 
Cables. 

Capstan bars. 

Carpets. 

Charts. 

China, crockery, and glass* 
ware. 

Chronometers, 

Clocks. 

C^ompasses. 

Counters. 

Desks. 

Engines and foundations. 
Fire buckets. 

Fire extinguishers. 

Floor coverings. 


Flue cleaners. 

Furniture. 

Gangplanks. 

Hatchets. 

Heating equipment. 
Hoisting equipment. 
Hooks. 

Keys. 

Kitchen equipment. 

Life preservers. 

Lighting equipment. 
Linen. 

Lines* 

Logs. 

Machinery and founda* 
tions. 

Masts. 

Oiflee furniture. 

Oil cans. 

Pianos and other musical 
instruments. 

Pumps, 


Racks. 

Railings. 

Rakes. 

Rigging. 

Safes. 

Sails. 

Scales. 

Seats, chairs, and cush* 
ions. 

Shovels 

Slice bars and pokeri* 
Spyglasses. 

Steam distribution sys* 
terns. 

Steering equipment. 
Telescopes. 

Ticket cases. ; 

Tool boxes. 

Tools, miscellaneous. 
Tracks on car Itoats. 
Ventflating equipment. 
Wrenches. 



836 Analysis of Railroad Operations 

Note A. — ^When the compensation for the use of floating equipment 
includes rent, maintenance, and operation, the portion covering rent 
shall be included in income account No. 539, “Rent for floating equip- 
ment,” the portion covering repairs shall be included in this account, 
the portion covering depreciation shall be included in account No. 324, 
“Floating equipment — Depreciation,” and the portion covering opera- 
tion shall be included in account No. 408, “Operating floating equip- 
ment,” or in the primary accounts in general account V, Transporta- 
tion — ^Water Line, as may be appropriate. 

Note B. — ^The cost of repairs resulting from casualties shall be 
charged to the casualty accounts when covered by insurance and to 
insurance reserves to the extent of the accruals therein when such 
reserves have been provided for the damage to property. Any part of 
such cost not recoverable from underwriters or chargeable to insurance 
reserves shall be charged to the repair account. 

J24. FLOATING EQUIPMENT— DEPRECIATION. 

This account shall include uniform monthly charges representing the 
depreciation of floating equipment other than work equipment. These 
charges shall be based upon the percentage of the original cost 
(estimated if not known), ledger value, or purchase price of such 
equipment determined to be equitable from the carrier’s experience 
and best sources of information as to the average current loss from 
depreciation. A statement of the percentages used by the carrier for 
computing these charges, together with the estimated life of the 
equipment upon which such percentages are based, shall be included 
in its annual report to the Commission. 

Depreciation charges with respect to any floating equipment shall 
cease when the difference between the ledger value and the estimated 
scrap value shall have been credited to the accrued depreciation ac- 
count. 

Note A, — All charges to this account for depreciation of the car- 
rier’s equipment shall be concurrently credited to balance-sheet account 
No. 776, “Accrued depreciation — Equipment,” 

Note B. — ^When the compensation for the use of floating equipment 
includes rent, maintenance, and operation, the portion covering rent 
shall be included in income account No. 539; “Rent for floating equip- 
ment,” the portion covering repairs shall be included in account No. 
323, “Floating equipment — Repairs,” the portion covering depreciation 
shall be included in this account, and the portion covering operation 
shall be included in account No. 408, “Operating floating equipment,” 
or in the primary accounts in general account V, Transportation- 
Water Line, as may be appropriate. 

325. FLOATING EQUIPMENT— RETIREMENTS. 

This account shall include amounts necessary to adjust the differ^ 
ence between the ledger value (less salvage) of floating equipment, 
other than work equipment, retired from service and the amount of 
accrued depreciation charged on account of such retired equipment 
to the date of its retirement. (See road and equipment account II, 
Equipment, paragraphs 4 and 5.) 



Appendix B 237 

Note. — ^When floating equipnient is permanently retired from service 
but held pending disposition, it shall be written out of service and 
carried in an appropriate suspense account at an equitable valuation. 

326. WORK EQUIPMENT-REPAIRS. 

This account shall include the cost of repairing rail and floating 
work equipment, including appurtenances, and cost of small hand tools 
used in repairs. 

The cost of fitting up commercial cars for work service in connection 
with maintenance and operation; the cost of refitting them for com- 
mercial service ; the cost of repairs to locomotives while in service for 
repairs of road and equipment; and the cost of repairs to foreign 
cars damaged while in such service shall be included in this account; 
also amounts paid in settlement for such cars destroyed in such 
service. 

(Note carefully special instructions, sections 2 and 3, and gener^ 
instructions for income, profit and loss, and general balance-sheet 
accounts, section 2.) 


LIST OF WOJtK B9T7XPKBKT— FAIL. 

(See special instnictio&s^ section 22.) 


Air-brake instruction cars. 
Ballast cars. 

Ballast unloader cars. 
Boarding cars. 

Bridge cars. 

Business cars. 

Camp cars. 

Cinder cars. 

Concrete mixers 
(mounted). 

Derrick cars. 

Dirt spreaders (mounted). 
Ditching cars. 

Dump cars. 

Dynamometer cars. 
Gas-tank cars. 


Grading ears. 

Gravel cars. 

Indicator cars. 

Locomotive tanks used as 
water cars. 

Locomotives. 

Officer’s cars. 

Outfit cars. 

Painters* ears. 

Pay cars. 

Pile drivers (mounted)^ 
Rail saws (mounted). 
Salt cars. 

Sanding cars. 

Scale test cars. 

Scraper cars, 


Snow doeers. 

Snow drags. 

Snow plows (not attached 
to but moved by loco- 
motives). 

Sprinkling earsb 
Steam shovels. 

Steam wrecking derricks* 
Supply cars. 

Sweeper cars. 

Tool and block cars. 

Tool cara. 

Water can, 

Weed burners (mounted). 
Wrecking cars. 


APFUaTSFANCBS TO WOES BQUXPKBKT— KAIL. 
(See special instructioni, section 22.) 


Air-brake eauipment. 

Beds and bedding. 
Blocking, 

Blocks and tackle. 

Boilers on cars. 

Bunks, seats, and chairs. 

China, crockery, and fidasc* 
ware. , 

Curiiions. 

Rnginei on cars. 


Flue cleaners. 
Hatchets, 

Heating equipment. 
Hooks. 

Jacks. 

Kitchen utensils. 
Lighting equipment 
Linen. 

Lines, 

on can. 

OU cans. 


Rakea 

Ranges. 

Shovels, 

Slice bars and pokers. 
Tool boxes. 

Tools, miscellaneous. 
Train-signal equi^ent. 
Wrecking trucks. 
Wrenches, 



238 


Analysis of Railroad Operations 

LIST OP WORK equipment — FLOATING. 

(See special instructions, section 22.) 

Derricks. Dredges. Pile drivers. 


APPURTENANCES TO WORK EQUIPMENT — FLOATING. 


(See 

Anchors. 

Axes. 

Barometers. 

Beds and bedding. 

Blocks and tackle. 

Boilers and foundadons. 
Cables. 

China, crockery, and glass* 
ware. 

Compasses. 

Cushions. 

Desks. 

Engines and foundations. 
Fire extinguishers. 

Fire buckets. 


special instructions, section 

Floor coverings. 

Flue cleaners. 

Gangplanks. 

Hatchets. 

Heating equipment. 
Hoisting equipment. 

Hooks. 

Keys. 

Life preservers. 

Lighting equipment. 

Linen. 

Lines. 

Machinery and founda- 
tions. 

Masts. 


22 .) 

Oil cans. 

Pumps, 

Rakes. 

Rigging. 

Sails. 

Seats and chairs. 

Shovels. 

Slice bars and pokers. 
Steam distribution sys- 
tems. 

Steering equipment. 

Tool boxes. 

Tools, miscellaneous. 
Wrenches. 


Note. — The cost of repairs to work equipment on account of con- 
struction work shall be included in the cost of the construction work 
on which it is used, (See general instructions for the classification 
of investment in road and equipment, section 4c.) 

327. WORK EQUIPMENT-DEPRECIATION. 

This account shall include uniform monthly charges representing the 
depreciation of work equipment. These charges shall be based upon 
the percentage of the original cost (estimated if not known), ledger 
value, or purchase price of such equipment, determined to be equitable 
from the carrier’s experience and best sources of information as to 
the average current loss from depreciation. A statement of the 
percentages used by the carrier for computing these charges, together 
with the estimated life of the equipment upon which such per- 
centages are based, shall be included in its annual report to the 
Commission. 

Depreciation charges with respect to any work equipment shall 
cease when the difference between the ledger value and the estimated 
scrap value shall have been credited to the accrued depreciation ac- 
count. 

(See general instructions for income, profit and loss, and general 
balance-sheet accounts, section 2.) 

Note.— All charges to this account for depreciation of the carrier's 
equipment shall be concurrently credited to balance-sheet account No. 
776, ''Accrued depreciation — Equipment.” 

328. WORK EQUIPMENT— RETIREMENTS. 

This account shall include amounts necessary to adjust the differ- 
ence between the ledger value (less salvage) of work equipment re- 



Appendix B 239 

tired from service and the amount of accrued depreciation charged 
on account of such retired equipment to the date of its retirement. 
(See road and equipment account II, Equipment, paragraphs 4 and 5.) 

Note. — When work equipment is permanently retired from service, 
but held pending disposition, it shall be written out of service and 
carried in an appropriate suspense account at an equitable valuation. 

329. MISCELLANEOUS EQUIPMENT-REPAIRS. 

This account shall include the cost of repairing miscellaneous equip- 
ment, such as wagons, automobiles, and other highway vehicles, and 
harness. 

(Note carefully special instructions, sections 2 and 3.) 

330. MISCELLANEOUS EQUIPMENT— DEPRECIATION. 

This account shall include uniform monthly charges representing 
the depreciation of miscellaneous equipment. These charges shall 
be based upon the percentage of the original cost (estimated if not 
known), ledger value, or purchase price of such equipment, determined 
to be equitable from the carriers experience and best sources of 
information as to the average current loss from depreciation. A 
statement of the bases used by the carrier for computing these charges 
shall be included in its annual report to the Commission. 

Note. — All charges to this account for depreciation of the carrier’s 
equipment shall be concurrently credited to balance-sheet account No. 
776, ‘‘Accrued depreciation — Equipment.” 

331. MISCELLANEOUS EQUIPMENT— RETIREMENTS. 

This account shall include amounts necessary to adjust the difference 
between the ledger value (less salvage) of miscellaneous equipment, 
including horses, retired from service and the amount of accrued de- 
preciation charged on account of such retired equipment to the date 
of its retirement, (See road and equipment account II, Equipment, 
paragraphs 4 and S.) 

Note. — ^Miscellaneous equipment permanently retired from service, 
but held pending disposition, shall be written out of service and 
carried in an appropriate suspense account at an equitable valuation. 

332. INJURIES TO PERSONS. 

This account shall include expenses on account of injuries to 
persons which occur directly in connection with repairs of equipment 

Services of employees and others called in consultation in relation 
to claim adjustments, pay and expenses of employees while engaged as 
witnesses at inquests and lawsuits, and a suitable proportion of dona^ 
tions made to hospitals shall be included in this account. 



240 


Analysis of Railroad Operations 


ZTBMS OF BXFBBSK. 


(See special instruction^ section 22.) 


Artificial limbs. 

Carriage fees, 

Claim adjusters* and clerkaf services, 
(^aim adjusters* office expenses. 
Compensation for injuries or death. 
Final judgments, including plaintiffs* 
court costs. 

Funeral expenses. 

Hospital attendance. 


Medical and surgical services. 

Medical and surgical supplies. 

Notarial fees. 

Nursing. 

Railway transportation. 

Undertakers* services. 

Undertakers* supplies. 

Witnesses* fees and expenses at inquests 
and lawsuits. 


Note A. — ^Expenses incident to personal injury suits, not otherwise 
provided for, shall be included in account No. 454, “Law expenses.” 

Note B. — ^Amounts donated by a carrier to hospitals shall be dis- 
tributed, 25 per cent to account No. 274, “Injuries to persons”; 25 
per cent to account No. 332, “Injuries to persons”; and SO per cent 
to account No. 420, “Injuries to persons.” 

Note C. — The pay. office rent, and office and other expenses of claim 
adjusters, claim clerks, and others in charge of or engaged in connec- 
tion with claim cases, when not assignable to a distinct class of 
claims, shall be apportioned equally among the several classes of claims 
over which they have jurisdiction or in connection with which they 
are engaged. 

333. INSURANCE. 

This account shall include premiums, except reinsurance premiums, 
for insuring the carrier against loss, through injuries to persons or 
damage to or destruction or loss of property, whether caused by fire, 
accident, or other cause, when sucli loss to the carrier would be 
chargeable to Maintenance of Equipment ; also premiums on fidelily 
bonds of employees whose pay is chargeable to Maintenance of Equip- 
ment. (See special instructions, section 18.) 

Note. — The premiums paid by the carrier to its insurance fund shall 
be credited to an insurance reserve account, to which account shall be 
charged the amount of all claims for injuries to persons and damages 
to the property covered by its insurance. To such account shall also 
be charged all reinsurance premiums paid to insurance companies, and 
to it shall be credited all amounts recovered from insurance companies 
for damage to the property reinsured by them. 

334. STATIONERY AND PRINTING. 

This account shall include the cost of stationery and printing used 
in connection with maintenance of equipment. 



341 


Appendix B 


STATIONEIY AND PRINTING ITEMS. 

(See special ittstntctions, section 22.) 


Adding machinea. 
Addressographs and sup* 
plies. 

Arm rests. 

Binders. 

Blank books. 

Blotters. 

Blotting paper. 

Bristol board. 

Calculating machines. 
Calendars. 

Carbon paper. 

Cardboard. 

Cards, blank and printed. 
Circulars. 

Computing tables. 

Copy (impression) books. 
Copying brushes. 

Copying presses. 

Crayons. 

Cyclostyles. 

Dating stamps and rib- 
bons. 

Dictaphones. 

Dictographs. 

Drawing paper. 
Duplicators. 

Electric pens. 

Envelopes. 

Erasers, rubber and steel. 
Eyelet punches. 

Eyelets. 

File boxes, paper. 

Forms, blank and printed. 
Glass pens. 


Hectographs. 

Indexes. 

£nk for writing and draw- 
ing. 

Xnkstands. 

Invoice books. 

Legal cap paper. 

Letter paper. 

Manifold paper. 

Manifold pens. 
Mimeographs. 

Mucilage. 

Mucilage brushes. 
Neostyies. 

Note paper* 

Notices, 

Numbering stamps. 

Oil paper. 

Paper. 

Paper baskets. 

Paper clips. 

Paper cutters. 

Paper fasteners. 

Paper files. 

Paper weights. 
Papyrograpfas. 

Parchment paper. 

Pencil sharpeners. 

Pencils for writing and 
drawing. 

Penholders. 

Penracks. 

Pens for writing and 
drawing. 

Phonographs and records. 


Pina 

Postage. 

Punches (not conductors* 
or baggagemen's). 
Rubber bands. 

Rubber stamps. 

Rulera 
Ruling pens. 

Scrapbooks. 

Sealing wax. 

Seals. 

Shears. 

Shipping tags. 

Shorthand notebooksu 
Sponge cups. 

Sponges. 

Stamps, impression. 
Stylographs. 

Tablets, blank and 
print^ 

Tape, 

Telegraph blanks. 

Tissue (impression) 
paper, 

Tracing cloth. 

Tracing paper. 

Twine. 

Typewriters and ribbona 
Wage tablea 
Wastebaskets. 

Water colors. 

Water holders. 

Wrapping paper. 
Wringers for copying 
presses 


Note. — The cost of dictionaries, periodicals, technical books, etc., 
shall be included in the appropriate superintendence accounts. 


335. OTHER EXPENSES. 

This account shall include expenses in connection with the main^ 
tenance of equipment not properly chargeable to other accounts for 
maintenance of equipment or to clearing accounts such as “Material 
store expenses*' and “Shop expenses." 


ITBMS OF EXPENSE. 

(See special instruerions^ section 22.) 

Pay and expenses of mechanical department employees attending conferences 
with officers in connection with mechanical department wage disputes. 

Fees paid arbitrators in connection with mechanical department wage diiq^ntes. 
Paj^ents to mechanical department employees for time absent on account of 
sickness when not in compensation for personal injuriea 

336. MAINTAINING JOINT EQUIPMENT AT TERMINALS-DR. 
This account shall include the carrier’s proportion of eacpenses in- 
curred by others in maintaining equipment used for the operation of 



242 Analysis of Railroad Operations 


joint terminals, including the carrier's proportion of expenses of re- 
pairing equipment made necessary by accidents in terminals, when 
such expenses are participated in by more than one party using the 
joint terminals. 

Note. — The purpose of this account is to show the amount accruing 
against the carrier for its proportion of the expense of maintaining 
equipment at terminals which is maintained by others and in the 
joint use of which the carrier participates. 

337. MAINTAINING JOINT EQUIPMENT AT TERMINALS— CR. 

This account shall include amounts chargeable to others as their pro- 
portions of expenses incurred by the carrier in maintaining equipment 
used for the operation of joint terminals, and for expenses of repair- 
ing equipment made necessary by accidents in terminals, when such 
expenses are participated in by more than one party using the joint 
terminals. 

Note. — The purpose of this account is to show the amounts accruing 
in favor of the carrier and against others for their proportions of 
the expense of maintaining equipment at terminals which is main- 
tained by the carrier and in the joint use of which others participate. 

[Accounts 336 and 337 amended Aug. 1, 1925, to include equipment 
in joint train service.] 


m. TRAFFIC 

The primary accounts included in this general account are designed 
to show the expenses incurred for advertising, soliciting, and securing 
traffic for the carrier’s lines and for preparing and distributing tariffs 
governing such traffic. 

The accounts for traffic expenses shall be kept in such manner as to 
show separately, by primary accounts, the expenses directly assignable 
to water-line operations. 


351. SUPERINTENDENCE. 

This account shall include: 

Fay of officers. — The pay of officers directly in charge of or 
engaged in supervising the procurement of traffic, and the preparation 
and distribution of tariffs, division sheets, and classifications. 


LIST OF OFFICERS. 

(See special insimctions, section 22.) 


Vice president 
Assistant to vice president 
Traffic director. 

Traffic manager. 

General freight agent. 

Assistant general freight agent 
Chief of tariff bureau. 
Traveling tariff inspector. 

Live stock agent. 


General passenger agent. 

Assistant general passenger agent 
Division passenger agent. 
Division freight agent. 

General baggage agent. 

General express agent 
General express manager. 

Coal traffic agent. 


Pay of clerks and attendants.— The pay of clerks and other em- 
ployees in the offices and on business cars of ofidcers whose pay is 
chargeable to this account. 



243 


Appendix B 

XJST OF XMFLOySBB. 

(See special iastructioas, section 22.) 

Chief clerk. Stenographers. Porters, 

Clerks. Messengers, Attendants. 

Pile clerks. Cooks, 

Office and other expenses. — Office expenses and other expenses 
of officers and employees whose pay is chargeable to this account. 


Atlases and maps. 
Barometers. 

Bicycles. 

Books for office use. 
Business car service. 
Express charges. 

Fees and dues in commer* 
cial and other clubs. 


ITEMS OF XXPBKSB AMD SVPFLXES. 

(See special instructions^ section 22.) 

Furniture repairs and re- Provisions 
newals. 

Heating. 

Lighting. 

Official train service. 

Periodicals and news- 
papers. 

Power. 


for business 

cars. 

Rent of offices. 

Repairs of rented offices. 
Telegraph service. 
Telephone service. 
Traveling expenses. 

Water and ke. 


Note A.— When officers designated above have supervision over more 
than one department, their salaries, the pay of their clerks and at- 
tendants, and their office and other expenses shall be apportioned 
equally among the departments over which they have jurisdiction. 

Note B. — The pay and expenses of officers engaged exclusively in 
soliciting traffic are chargeable to account No. 352, “Outside agencies.'' 

Note C — The cost of stationery for traffic officers is chargeable to 
account No. 358, ‘‘Stationery and printing,’' except stationery charge- 
able to accounts Nos. 354, 355, and 356. 

352. OUTSIDE AGENCIES. 

This account shall include the pay, and the office, traveling, and 
other expenses of general, commercial, city, and district agents and 
others soliciting traffic, the employees of their offices, and traveling 
agents and solicitors located on or off the line of the carrier's road. 

City ticket and freight offices, separate from regular station tkket 
and freight offices, shall be treated as outside agencies; the pay and 
expenses of the employees therein and the expenses of such offices 
shall be charged to this account. 

Commissions for services pertaining to either freight or passenger 
business, except commissions paid in lieu of salaries to carrier’s 
agents located upon the carrier’s own line (which shall be charged 
to account No, 373, “Station employees"), shall be included in this 
account 

ITEMS OF SXF8MSX. 

(See special instructioss^ sectioa 22.) 

Bicycles. OfBce supplies. 

Books for ofSce use. Feriodic^s aad newspapers. 

Express charges. Rent of oBcea* 

Furniture repairs and renewala. Repairs and rented offices. 

Heating. Telegraph service. 

Lighting. Telephone service. 

Membership fees and dues in agency Traveling expenses. 

associations. Water and ice. 

Membership fees and does in eomxnerw 
cial clubs. 



244 Analysis of Railroad Operations 

353. ADVERTISING. 

This account shall include the cost of advertising for the purpose 
of securing traffic; pay of advertising agents, their clerks and attend- 
ants; rent of offices, and the office, traveling, and other expenses of 
such employees ; also donations to carnivals, local development associa- 
tions, summer schools, and other gatherings, when made for the 
purpose of increasing traffic. 

ITEMS OF ASVBSTISZKG EXFSNSB* 

(See special instructions, section 22.) 

Advertisements in newspapers. Handbills. 

Advertisements in periodicals. Maps used for advertising. 

Bulletin boards and cards. Pamphlets. 

Card cases. Photographs and views. 

Customs charges on advertising matter. Postage. 

Display and other advertising cards. Posters. 

Distributing folders. Publishing advertising matter. 

Distributing general notices to shippers. Publishing folders. 

Distributing time-tables. Publishing notices to shippers. 

Dodgers. Publishing time-tables. 

Express charges. Racks. 

Frames. 

Note. — ^Advertising expenses of industrial and immigration bureaus 
shall be included in account No. 356, “Industrial and immigration 
bureaus.” 

354. TRAFFIC ASSOCIATIONS. 

This account shall include the cost to the carrier of participation 
in traffic associations, including its proportion of the pay of officers 
and employees of such associations and of their office, stationery and 
printing, traveling, and other expenses. 

LIST OF TRAFFIC ASSOCIATIONS. 

(3ee special instructions, section 22.) 

Boards of trade. Commercial associations. Passenger associations. 

Classification bureaus. Freight associations. Tariff bureaus. 

Clergy bureaus. Mileage ticket bureaus. Ticket validating agencies. 

355. FAST FREIGHT LINES. 

This account shall include the cost to the carrier of participation 
in fast freight or dispatch organizations, including its proportion of 
the pay of officers, soliciting agents, and employees of such organiza- 
tions, and their office, stationery and printing, traveling, and other 
expenses. 

356. INDUSTRIAL AND IMMIGRATION BUREAUS. 

This account shall include the cost to the carrier of industrial and 
immigration bureaus, including the pay of industrial and immigration 
agents, and exhibit agents, their clerks and attendants and their office, 
stationery and printing, traveling, and other expenses. 

ITEMS OF SXFSNSS. 

(See special instruction^ section 22.) 

Advertising. Donations to fairs. Good roads trains. 

Agricultural trains. Donations to stock shows. Premiums to fairs. 

Dairy trainsu Exhibits. Premiums^ sto^ shows. 

Donations to ezpomtions. Experimental fanns. 



Appendix B 


m 


357. INSURANCE. 

This account shall include premiums, except reinsurance premiums, 
for insuring the carrier against loss through injuries to persons or 
damage to or destruction or loss of property, whether caused by fire, 
accident, or other cause, when such loss to the carrier would be 
chargeable to Traffic; also premiums on fidelity bonds of employees 
whose pay is chargeable to Traffic. (See special instructions, sec- 
tion 2.) 

Note, — The premiums paid by the carrier to its insurance fund shall 
be credited to an insurance reserve account, to which account the 
amount of all claims for injuries to persons and damages to the 
property covered by its insurance shall be charged. To such account 
shall also be charged all reinsurance premiums paid to insurance com- 
panies, and to it shall be credited all amounts recovered from insur- 
ance companies for damage to the property reinsured by them. 

358. STATIONERY AND PRINTING. 

This account shall include the cost of stationery and printing used 
in connection with securing traffic, including the cost of tariffs govern- 
ing such traffic. 


STATXOKBKY AMD PRINTING ITBUS. 

(See special ifistractions, seettoii 22.) 


Adding macliines. 

Glass pens. 

Phonographs and recorda 

Arm rests. 

Hectographs. 

Pina 

Binders. 

Indexes. 

Postage. 

Blank books. 

Ink for writing and' draw- 

Punches (not conductors* 

Blotters. 

ing. 

or baggagemen*8). 

Blotting paper. 

Inkstands. 

Rate sheeta 

Bristol board. 

Invoice books. 

Rubber bands. 

Calculating machines. 

I<egal cap paper. 

Rubber stampa 

Calendars. 

Letter paper. 

Rulera 

Carbon paper. 

Manifold paper. 

Ruling pena 

Cardboard. 

Manifold pena 

Scrapbooka 

Cards, blank and printed. 

Mimeographs. 

Sealing wax. 

Circulars. 

Mucilage. 

Seala 

Classifications. 

Mucilage brushes. 

Sheara 

Computing tables. 

Neostyles. 

Shipping taga 

Copy (impression) books. 

Note paper. 

Shorthand-notebooka 

Copying brumes. 

Noticea 

Sponge cupa 

Copying presses. 

Numbering stamps. 

Spongea 

Crayons. 

Oil paper. 

Stampa impression. 

Cyclostyles. 

Paper, 

Stylographa . 

Dating stamps and ribbons. 

Paper basketa 

Tableta blank and printed. 

Dictaphones, 

Paper clipa 

Tape. 

Dictographs. 

Paper cuttera 

Tariffa ptinted. 

Division sheets. 

Paper fasteners. 

Telegraph blanka 

Duplicators. 

Electric pens. 

Paper fiilea 

Paper weighta 

Tissue (impression) paper. 
Typewriters and ribbons. 

Envelopes. 

Papyrographs. 

Wage tablea. 

Erasers, rubber and steel. 

Pencil sharpenera 

Wastebaskeia 

Eyelet punehesi 

Pencils for writing and 

Water eolota 

Eyelets. 

drawing. 

Water holdera 

File boxes, paper. 

Penholdera 

Wrapping paper. 

Wringers Ipr copying 

Flexotype machines. 

Fenracka 

Forms, blank and printed. 

Pens for writtog and draw- 

presiea 

Freight elassificationa, 

biS* 




246 Analysis of Railroad Operations 

Note A.— The cost of dictionaries, periodicals, technical books, 
etc., shall be included in the appropriate superintendence accounts. 

Note B.— The cost of stationery and printing used by traffic asso- 
ciations, fast freight lines, and industrial and immigration bureaus 
shall be included in the accounts provided for the expenses of such 
organizations. 

359. OTHER EXPENSES. 

This account shall include all expenses in connection with traffic 
not properly chargeable to other traffic accounts. 


IV. TRANSPORTATION— RAIL LINE. 

The primary accounts included in this general account are designed 
to show expenses incurred for transporting persons and the property 
of others, including the expenses of station, train, yard, and terminal 
service; also the expense of transporting company material in trans- 
portation service trains. 

371. SUPERINTENDENCE. 

This account shall include: 

Pay of OFFicERS.—The pay of officers directly in charge of or 
engaged in conducting transportation. 


LIST OF OFFICBK8. 


(See special instructions, section 22.) 


Vice president. 

As^stant to the vice president. 
General manager. 

Assistant general manager. 

General superintendent of transport 
Superintendent of transportation. 
General superintendent. 

Assistant general superintendent. 
Superintendent, 

Division superintendent. 

Assistant division superintendent. 
Superintendent of car service. 
Chief special agent. 


Members of examining boards. 
Superintendent of mail serrice. 
Traveling train and station inspectors. 
Air-brake instructor. 

Superintendent of agencies. 
Superintendent of transfer stations. 
Trainmaster. 

Assistant trainmaster. 

General road foreman of locomotives. 
Road foreman of locomotives. 
Traveling locomotive engineer. 
Traveling locomotive fireman. 


Pay of clerks and attendants. — ^The pay of clerks and others em- 
ployed in the offices and on business cars of officers whose pay is 
chargeable to this account. 


LIST OP SICPLOTSSS. ^ 

(See special instructions, section 22.) 

Divirion clerk. Special agents. Messengers. 

Chief clerk. Detectives. Cooks. 

Clerks. Stenographers. Porters, 

Office and other expenses, — Office expenses and other expenses of 
officers and employees whose pay is chargeable to this account; also 
the pay and expenses of employees attending investigations concern- 
ing the cause of or responsibility for accidents, and amouftts paid 
detective agencies and others for work in connection with such in- 
vestigations. 



247 


Appendix B 


ITEMS OF EEPSKSB AKD SUPPLIES. 


(See special instructions^ section 22.) 


Atlases and maps. 

Barometers. 

Books for office use. 

Business car service. 

Express charges. 

Fees and dues in associations. 
Furniture repairs and renewals. 
Heating. 

Lighting. 

Official train service. 


Periodicals and newspapers. 

Power. 

Provisions for business cars. 

Rent of air-brake instruction carsw 
Rent of offices. 

Repairs of rented offices. 

Telegraph service. 

Telephone service. 

Traveling expenses. 

Water and ice. 


Note A.— When ofHcers designated above have supervision over 
more than one department, their salaries, the pay of their clerks 
and attendants, and their office and other expenses shall be apfwrtioned 
equally among the departments over which they have jurisdiction. 

Note B. — The cost of stationery purchased for transportation offices 
is chargeable to account No. 410, ‘'Stationery and printing,” 


372. DISPATCHING TRAINS. 

This account shall include the pay of chief and other train dispatch- 
ers, their clerks, copying operators, and attendants, and pay of opera- 
tors on the line whose duties are confined to directing train move- 
ments ; also the office, traveling, and other expenses of such employees. 

Note. — Pay of operators who also perform station work shall be 
charged to account No. 373, “Station employees.” 

373. STATION EMPLOYEES. 

This account shall include: 

Agents, clerks, and attendants.— The pay of agents, clerks, and 
attendants in charge of, or engaged in, the operation of stations, 
wharves, and piers located on the carrier's line; also payments to 
such station or ticket agents in lieu of salaries. 

Special payments to customs inspectors on account of opening and 
resealing cars under unusual conditions, and payments to produce- 
exchange inspectors for inspecting, measuring, and weighing grain 
shall be here included. 


USX or XMFLOYXEi, 

(See special instructiotts^ section 22.) 


Accountants. 

Assistant agents. 

Assistant depot masters. 
Assistant stationmasters. 
Baggage agents at stations. 
Baggagemen. 

Car clerks. 

Cashiers. 

Chauffeurs. 

Clerk& 

Collectors. 

Customs inspectors. 

Depot masters.^ 

Detectives. 


Express agents. Station foremen. 

Gatemen, Station passenger agents. 

Information bureau tm- Station freight agents. 

ployees. Stationmasters. 

Janitors. Telegraph and telephone 

Maids. operators. 

Matrons. Ticket agents. 

Messengers. Ticket collectors. 

Package and parcel room Ticket examiners. 

employees. Train callers; 

Policemen. Ushers, 

Porters, Watchmen. 

Relief agents. 

Station agents. 



248 Analysis of Railroad Operations 

Labor at stations.— Station and other labor expended in handling 
freight, mail, baggage, and express at stations, wharves, and piers; 
in loading, unloading, feeding, and watering stock; in disinfecting 
stations, stockyards, and stock pens; in transferring, picking up, 
straightening, and reloading freight in the ordinary course of trans- 
portation; in miscellaneous station work, including (when done by 
station employees) cleaning station grounds, station platforms, walks, 
stockyards, and stock pens, and removing snow and ice therefrom; 
and in tending switch lamps not in yards and terminals. 

Payments to elevator companies (when not made as division of 
rate) for transferring grain en route, and payments to other com- 
panies and individuals for loading and unloading commercial freight 
under contract or otherwise shall be included in this account. 


UST OF £2iPLOYSE8. 

(See special instructions, section 22.) 


Baggage storeroom em< 
ployees. 
sealers. 

Cbeckmen. 

Coal handlers. 

Coopers. 

Delivery men. 
Electricians. 

Freight callers. 


Freight handlers. 
Freight house foremen. 
Freight loaders. 

Freight unloaders. 
Longshoremen. 

Mail carriers. 

Mail weighers. 

Station cleaners. 
Stationaiy engineers. 


Stationary firemen. 

Stevedores. 

Stock-pen laborers. 

Tallymen. 

Teamsters. 

Truckmen. 

Warehousemen, 

Weighmasters. 


Note A.— The cost of transferring freight, mail, baggage, and ex- 
press on account of wrecks shall be included in account No, 415, 
“Clearing wrecks,” 

Note B. — This account shall not include the pay of telegraph and 
telephone operators provided for under accounts No. 372, “Dispatch- 
ing trains,” and No. 407, “Telegraph and telephone operation,” or pay 
of employees provided for under account No. 375, “Coal and ore 
wharves.” 

374. WEIGHING, INSPECTION, AND DEMURRAGE BUREAUS. 

This account shall include the cost to the carrier of its participation 
in joint weighing, inspection, demurrage, and car distribution bureaus 
and associations. 

375. COAL AND ORE WHARVES. 

This account shall include the cost of operating docks, and wharves, 
piers, and other marine, lake, or river landings, and the machinery 
located thereon, used in connection with the transportation of coal 
and ore. 

Labor and expenses. — The pay and the office, traveling, and other 
expenses of employees engaged in operating coal and ore wharves. 

Tools and supplies. — ^The cost of all tools and supplies used in 
the operation of coal and ore wharves. 



Appendix B 249 

ITEMS 07 TOOLS AND SU77LIBS. 

(See special instructions, section 22.) 

Cylinder oiL Lantern parts. Shovels. 

Fuel for stationary boil- Lanterns. Slice bars, 

ers. Lubricating oil. Waste. 

. Illuminating oil. Picks. Wicks, 


Note. — The cost of stritching service in connection with coal and ore wharves 
i^all not be included in this account. 

376. STATION SUPPLIES AND EXPENSES. 

This account shall include; 

Heating. — The cost of fuel (including cost of unloading), water, 
steam, and miscellaneous supplies used for heating stations, waiting 
rooms, freight and passenger offices, and other station buildings. 

Lighting. — The cost of fuel, water, gas, oil, electricity, lamp globes, 
lamp chimneys, wicks, lamp carbons, incandescent lamps, and miscel- 
laneous supplies used in lighting stations, waiting rooms, freight and 
passenger offices, other station buildings, street approaches thereto, 
and passenger footbridges and subways at stations. 

Other expenses. — T he cost of miscellaneous station supplies and 
station expenses. 


XTBMS or SX7BNSS. 

(See special instructions, section 22.) 


Cleaning privy vaults 
Express charges. 

Feeding and shoeing horses. 
Furniture repairs and renewals. 
Garage expenses. 

Licenses for ticket agents. 

Mail transfer by others than employees. 


Rent of scales. 

Rent of station buildings (not jointly 
used). 

Reports to agents of commercial stand- 
ing. 

Sprinkling station grounds. 

Station employees^ expenses. 


Membership fees and dues in agents^ Telegraph service. 

associations. Telephone service. 

Power for station machinery. Warehouse charges for storage of freight 

Rent of automatic weighing and record- Washing towels, 
ing devices. 



Analysis of Railroad Operations 


ITEMS OF TOOLS AND SUPPLIES. 



(See special instructions, section 22.) 

Atlases and maps. 


Floor coverings. 

Rakes. 

Auto trucks. 


Gangplanks. 

Reflectors. 

Awnings. 


Gas. 

Rolling chairs for invalids. 

Axes. 


Gasoline. 

Safes. 

Badges. 


Hampers. 

Sawdust. 

Baggage checks. 


Hatchets. 

Saws. 

Barometers. 


Hoes. 

Scoops. 

Baskets. 


Hooks. 

Scales, portable. 

Bicycles. 


Hose and couplings. 

Scrubbing brushes. 

Blocking. 


Ice. 

Settees. 

Brooms. 


Ice barrels. 

Shovels. 

Brushes. 


Ice boxes. 

Sledges. 

Buckets. 


Ice buckets. 

Soap, 

Bulletin boards. 


Ice carts. 

Spades. 

Call hells. 


Ice tongs. 

Sponges. 

Candles. 


Keys. 

Sprinkling cans.' 

Car-seal presses. 


Ladders. 

Stools. 

Car seals. 


Lamp burners. 

Stove blacking. 

Carpets. 


Lamp cbimneysL 

Stoves and stovepipe. 

Chains. 


Lamp fittings. 

Switch lamp supplies at 

Chair cushions. 


Lamp globes. 

points where regular 

Chairs. 


Lamp mantles. 

switching service is not 

Chalk. 


Lampblack. 

maintained. 

Chamois skins. 


Lamps (not permanently 

Tables. 

Check boxes. 


attached to buildings). 

Tacks. 

Check racks. 


Lantern fittings. 

Tarpaulins (not for cars). 

Checks. 


Lantern globes. 

Thermometers. 

Docks. 


Lanterns. 

Ticket cases. 

Coal hods. 


Letter boxes. 

Tongs. 

Cold chisels. 


Mail bags. 

Tool boxes. 

Cooperage material. 


Marking brushes. 

Torpedoes. 

Copy-press stands. 


Marking potsu 

Towels. 

Counter-brumes. 


Marline. 

Trucks. 

Counter scales. 


Matches. 

Twine. 

Cups. 


Measures. 

Uniforms. 

Curtains. 


Medical boxes. 

Washbasins. 

Cuspidors. 


Medical supplies. 

Waste. 

Desks. 


Mirrors. 

Water. 

Dippers. 


Money drawers. 

Water barrels. 

Directories. 


Hails for boxing. 

Water bowls. 

Dusters. 


Newspapers. 

Water cans. 

Electric fans. 


oa. 

Water coolers. 

Electric lamps. 


Oa cans. 

Water pails. 

ElectrioUght supplies. 

Packing material. 

Wheelbwows. 

Feather dusters. 


Padlocks. 

Whisk brooms. 

Feed for horses. 


Paas. 

Wicks. 

Files, document 


Pinch bars. 

Wrenches. 

Fire buckets. 


Punches for baggagemen 


Fire grenades. 


and gatemen. 



Flags. 

. YARDMASTERS AND YARD CLERKS. 

This account shall include the pay of general yardmaster, yard- 
master, assistant yardmaster, general yard foreman, and yard clerks 
and attendants in yards where regular switching service is maintained 
and in terminal switching and transfer service, including employees; 
engaged in calling yardmen and trainmen; also pay of policeniea, 
watchmen, and detectives in yard service. (See account Np. 38Sf, 
'*Yard supplies and expenses.”) 



251 


Appendix B 

378. YARD CONDUCTORS AND BRAKEMEN. 

This account shall include the pay of yard conductors or foremen 
and yard brakemen or switchmen handling cars in passenger and 
freight yards where regular switching service is maintained and in 
terminal switching and transfer service, including pay while dead- 
heading in connection with such service. (See account No. 389, 
'‘Yard supplies and expenses.”) 

Note. — When conductors and brakemen are engaged in both train 
and yard service their pay shall be apportioned between the train and 
yard accounts on the basis of service rendered. This does not apply 
to train switching service performed by train crews, the entire pay 
of whom shall be charged to account No. 401, ^Trainmen.” 

379. YARD SWITCH AND SIGNAL TENDERS. 

This account shall include the pay of employees in yards where 
regular switching service is maintained, who are engaged in the opera- 
tion of yard switches and signals, including interlockers used solely 
or principally for the government of all movements of locomotives 
and trains between main and yard tracks, movements of locomotives 
between yard tracks and engine houses, and yard switching movements. 
(See account No. 389, "Yard supplies and expenses.”) 

UST OF EMFLOYEBS. 

(See special instructions, section 22.) 

Lamplighters. Switch oilers. 

l>ver men. Switch tenders. 

Signalmen, Tower men. 

380. YARD ENGINEMEN. 

This account shall include the pay of yard engineers, and firemen 
while engaged in yards where regular switching service is main- 
tained and in terminal switching and transfer service, including pay of 
such employees while deadheading in connection with yard service. 

Note. — ^The pay of enginemen on locomotives engaged in more 
than one class of service shall be apportioned on the basis of service 
rendered. Pay of enginemen on train locomotives while engaged in 
train switching service shall be included in account No. 392, "Train 
enginemen.” The pay of enginemen on locomotives en^ged in work 
service shall be included in the cost of the work to which the service 
pertains. 

381. YARD MOTORMEN. 

This account shall include the pay of yard motormen while engaged 
in switching service in yards where regular switching service is main- 
tained, and in terminal switching and transfer service, including pay of 
such employees while deadheading in connection with yard service. 

Note.— The pay of motormen on locomotives engaged in more than 
one class of service shall be apportioned on the basis of service 


Battery men. 
Interlocker oilers. 
Lamp cleaners. 
Lamp men. 



252 Analysis of Railroad Operations 

rendered. Pay of motormen on train locomotives while engaged in 
train switching service shall be included in account No. 393, “Train 
motormen.” The pay of motormen on locomotives engaged in work 
service shall be included in the cost of the work to which the service 
pertains. 

382. FUEL FOR YARD LOCOMOTIVES. 

This account shall include the cost, delivered on locomotive tenders, 
of coal, coke, oil, wood, and other fuel consumed by locomotives in 
switching service in yards where regular switching service is main- 
tained, and in terminal switching and transfer service, including a 
suitable proportion of the pay of fuel agents, fuel inspectors, fuel 
weighers, and clerks engaged in accounting for fuel at fuel stations; 
pay of foremen and other fuel-station employees; also a suitable 
proportion of the cost of tools, such as wheelbarrows, shovels, scoops, 
and picks, used for handling fuel at such stations, and the cost of 
operating machinery at fuel stations. 

Note A. — The cost of repairs and renewals of coal chutes, buggies, 
pockets, air hoists, mechanical hoists, and mechanical conveyors at 
fuel stations shall be charged to account No. 233, “Fuel stations.” 

Note B. — The cost of supplies consumed by locomotives engaged 
in more than one class of service shall be apportioned upon the basis 
of service rendered. The entire cost of supplies consumed by train 
locomotives in train switching service shall be included in the accounts 
provided for train service. The supplies consumed by locomotives 
in work service shall be included in the cost of the work to which 
the service pertains. 

383. YARD SWITCHING POWER PRODUCED. 

This account shall include the cost of the production and distribution 
of electric power used in operating locomotives and cars in switching 
service in yards where regular switching service is maintained, and 
in terminal switching and transfer service. 

Employees. — The pay of employees engaged in operating electric- 
power stations and substations, such as engineers, firemen, electricians, 
dynamo men, oilers, cleaners, and coal passers. 

Fuel. — The cost of coal, oil, gas, and other fuel, including the 
cost of labor unloading or stocking fuel. 

Water. — The cost of water used to produce steam or to operate 
water plants, including pumping, rent of ponds, streams, and pipe lines ; 
also water tests, boiler compounds, and other like supplies and ex- 
penses. 

Other supplies and expenses.— The cost of lubricants, such as oil 
and grease used in lubricating engines, shafting, dynamos, and pumps ; 
cost of waste, carbon brushes, fuses, damps, and other supplies; also 
the cost of heating and lighting power plants, and other expenses not 
elsewhere specified in connection with operation of electric-^power 
plants. (See special instructions, section 12.) 



Appendix B 


253 


Note. — The cost of supplies consumed by locomotives engaged in 
more than one class of service shall, be apportioned upon the basis 9 ! 
service rendered. The entire cost of supplies consumed by train 
locomotives in train switching service shall be included in the accounts 
provided for train service. The supplies consumed by locomotives in 
work service shall be included in the cost of the work to which the 
service pertains. 

384. YARD SWITCHING POWER PURCHASED. 

This account shall include the cost of electric power purchased for 
the propulsion of engines and cars in switching service in yards 
where regular switching service is maintained, and in terminal switch- 
ing and transfer service. 


Note. — The cost of supplies consumed by locomotives engaged in 
more than one class of service shall be apportioned upon the basis of 
service rendered. The entire cost of supplies consumed by train 
locomotives in train switching service shall be included in the accounts 
provided for train service. The supplies consumed by locomotives in 
work service shall be included in the cost of the work to which the 
service pertains. 


385. WATER FOR YARD LOCOMOTIVES. 

This account shall include the cost of water supplied to locomotives 
in switching service in yards where regular switching service is main- 
tained, and in terminal switching and transfer service, including rent 
of ponds, lakes, other sources of water supply, and right of way for 
pipe lines; cost of vrater purchased, expenses of work trains while 
engaged in hauling water for locomotive supply, and cost of testing 
water; also cost of labor expended and cost of materials and sup- 
plies used in the operation of water stations and purifying plants. 

The cost of operating boilers, engines, and pumps at water stations ; 
heating and lighting water stations, breaking ice in water tanks, 
thawing out tank spouts and water cars, keeping fires in tanks and 
water cars to prevent freezing, shoveling snow into locomotive tanks; 
also temporary connections between water cars and locomotive tenders, 
compounds injected into locomotive boilers to decrease scale formation, 
and other expenses directly incident to the supplying of water to such 
locomotives, shall be included in this account. 

An equitable proportion of the pay and the office, traveling, and 
other expenses of superintendent of water service engaged in con- 
nection with water supply for locomotives shall be included in this 
account. 

XTEMS OF WATEK STATION SUPPUES, 


(See special instructions, section 22.) 


Axes. Gasoline drums. 

Boiler compounds. Hand tools. 

Chemicals. Hose. 

Coal. Oil. 

Coal picks. Rubber packing. 

Engine igniter batteries. Shovels. 
Gasoline* Siphons. 


Slice bars. 
Stove fixtures. 
Stoves. 

Waste. 

Wrenches* 



^54 


Analysis of Railroad Operations 


Note. — ^The cost of supplies consumed by locomotives engaged in 
more than one class of service shall be apportioned upon the ba^s 
of service rendered. The entire cost of supplies consumed by train 
locomotives in train switching service shall^ be included in the ac- 
counts provided for train service. The supplies consumed by locomo- 
tives in work service shall be included in the cost of the work to 
which the service pertains. 


386. LUBRICANTS FOR YARD LOCOMOTIVES. 

This account shall include the cost of valve, engine, car, and other 
lubricating oils, grease, compoimds, and waste used for lubrication of 
locomotives in switching service in yards where regular switching 
service is maintained and in terminal switching and transfer service. 


Note. — The cost of supplies consumed by locomotives engaged in 
more than one class of service shall be apportioned upon the basis of 
service rendered. The entire cost of supplies consumed by train 
locomotives in train switching service shall be included in the accounts 
provided for train service. The supplies consumed by locomotives in 
work service shall be included in the cost of the work to which 
the service pertains. 


387. OTHER SUPPLIES FOR YARD LOCOMOTIVES. 

This account shall include the cost of supplies, other than fuel, 
water, and lubricants, used on locomotives in switching service in 
yards where regular switching service is maintained and in terminal 
switching and transfer service, including the cost of repairs and re- 
newals of furniture, tools, and other movable articles required for 
use on locomotives in yard service. 

The cost of sand charged to this account shall include the cost of 
material and supplies used in preparing and drying the sand for use, 
such as die cost of fuel, wheelbarrows, shovels, and sand screens. 


Ash hoes. 

Ash-pan rods. 

Axes. 

Bars, buggy. 

Bell cords. 

Boxes, portable. 

Brooms. 

Brushes. 

Buckets. 

Carbide for acetylene gas. 
Carbons for electric lights. 
Chimneys for headlights. 
Chimneys for signal lamps. 
Chisels. 

Clinker hooks. 

Crowbars. 

Files. 

First-aid -boxes. 

Flags. 

Globes for lanterns. 

Grate shakers. 

Hammers. 

Handsaws. 

, Hatchiets»- 


ITEMS OP TOOtS AND SUPPLIES, 

(See special instructions, section 22.) 
Hose (not air-brake, air- Saws. 

signal, or steam). 

Hose, ihaw-out. 

Hose reds. 

Ice. 

Jacks. 

Jackscrews. 

Lanterns and parts. 

Locks for portable boxes. 
Matches, 

Oil cans. 

Oil for headlights. 

Oil for lanterns. 

Oil for signal lamps. 

Oil for torches. 

Oilers. 

Packing hooks. 

Packing spoons. 

Picks, cod. 

Pinch bars. 

Plugging bai% 

Pokers. 

Sand. 


Scoops, 

Shovels. 

Signal lamps. 

Sledges. 

Slice bars. 

Soap. 

Switch chains. 

Switch poles. 

Switch poles. 

Switch ropes. 

Tool boxes^ portable. 
Torches. 

Torpedoes, 

Waste, 

Water buckets. 

Water coolers. 

Wicks for headlights, 
Wicks for lanterns. 
Wicks for. si^al lamps^ 
Wicks for torches.. 
Wrecking frogl. ' 
Wrendies. 



Appendix B 255 

Note A. — Where the quantity of sand used on locomotives engaged 
in yard service is relatively small as compared with the quantity 
used by locomotives engaged in train service, the entire cost of such 
material shall be included in account No. 399, “Other supplies for train 
locomotives.” Where the quantity used in yard service is relatively 
large, the entire cost shall be included in this account. 

Note B. — The cost of other supplies consumed by locomotives en- 
gaged in more than one class of service shall be apportioned upon 
the basis of service rendered. The entire cost of supplies consumed by 
train locomotives in train switching service shall be included in the 
accounts provided for train service. The supplies consumed by loco- 
motives in work service shall be included in the cost of the work to 
which the service pertains. 

388. ENGINEHOUSE EXPEN SES-YARD. 

This account shall include the expense of caring for and preparing 
locomotives for switching service in yards where regular switching^ 
service is maintained and in terminal switching and transfer service, 
including a proportion of such expenses as are common to train, yard 
switching, and work service. 

Enginehouse men.— The pay of enginehouse employees engaged in 
wiping, cleaning, watching, and dispatching locomotives; keeping and 
preparing fires, dumping ashes, washing boilers, cleaning fire boxes, 
packing driving boxes and truck boxes; cleaning smokestacks, air- 
brake equipment, and front ends of locomotives; checking locomotive 
tool equipment, cleaning ash and cinder pits; operating turntables, 
drying sand, inspecting smokestacks and ash pans; calling enginemen; 
and moving locomotives around engine yards when operated by, 
hostlers; also a proportion of the pay of enginehouse foremen and 
their clerks. 

Miscellaneous expenses.— T he cost of tools, supplies, and sundry 
expenses on account of caring for and preparing locomotives at engine- 
houses. 

ITEMS OF MISeSUANSOVS EXPENSES. 

(Sso special instructions, section 22.) 

Boiled oil. Paint for front ends of locomotives. 

Compounds for cleaning and polishing. Power for operation of turntables and 
Enginehouse cupboards. transfer tables. 

Gas, oil, and electricity for lighting, Kent of roundhouse stalls. 

Heating enginehouses, including offices. Shovels. 

Lampblack. Signal lights on transfer tables and 

Lanterns used by enginehouse men. turntables. 

Lighting enginehouses, including offices. Waste. 

Lubricating oil for enginehouse, ash pit, Water for cinder pits. 

transfer table, and turntable macUn* Water for washing twilers, 

cry. Water bosc^ 

Lye. Wheelbarrows. 

Packing tools. 

Note A.— Enginehouse expenses of locomotives in work service 
shall be included in the cost of the work to which the service pertains. 

Note B.— The pay of mechanics and laborers engaged in locomotive 
repair work In enginehouses shall he charged to the appropriate ac- 
counts for {ocotnotive repairs. 



256 Analysis of Railroad Operations 

389. YARD SUPPLIES AND EXPENSES. 

This account shall include the cost of supplies (except locomotive 
supplies), used in yard service, yard signal and interlocker supplies, and 
miscellaneous yard expenses for yards where regular switching service 
is maintained ; also office and other expenses of employees whose pay 
is chargeable to accounts Nos. 377, 378, and 379. 

XTSMS OF YARD SUPPLIES. 

(See special instructions, section 22.) 

Electric-light carbons. Lamp wicks. Stoves. 

Electric-light globes. Lantern globes. Switch chains. 

Flags. Lantern wicks. Switch lamps. 

Fuel for heating. Lanterns. Switch ropes. 

Fuel for power. Lubricants for machinery Waste. 

Illuminating oil. and switches. Wrecking frogs. 

Lamp burners. Semaphore lamps. Wrecking wedges. 

Lamp chimneys. Signal lamps. 

ITEMS OF YARD EXPENSE. 

(See special instructions, section 22.) 

Electricity purchased for lighting yards Power purchased for operating switches 
and yard buildings. and signals. 

Furniture repairs and renewals. Rent of telephones. 

Gas purchased for lighting yards and Rent of yard buildings (not jointly 
yard buildings. used). 

Power produced for operating switches 
and signals. 

390. OPERATING JOINT YARDS AND TERMINALS— DR. , 

This account shall include the carrier's proportion of the costs 
incurred by others in their operation of joint yards and terminals, 
including signals, interlockers, and other facilities at such joint yards 
and terminals. 

Note A. — The purpose of this account is to show the amounts 
accruing against the carrier for its proportion of the cost of operating 
yards and terminals operated by others, and in the joint use of which 
the carrier participates. ^ ( See special instructions, section 9.) . 

Note B. — No proportions of items of expense chargeable by the 
operating carrier to accounts Nos. 392 to 402, inclusive, shall be in- 
cluded in this account. 

391. OPERATING JOINT YARDS AND TERMINALS— CR. 

This account shall include amounts chargeable to others as their 
proportions of the costs incurred by the carrier in the operation of 
joint yards and terminals, including signals, interlockers, and other, 
facilities at such joint yards and terminals. 

Noto a. — ^T he purpose of this account is to show the amounts 
accruing in favor of the carrier and against others for their proportions 
of the cost of^ operating yards and terminals operated by the carrier 
and in the joint use of which others participate. (See special in^ . 
structions, section 9.) 

Note B. — No proportions of items of expense chargeable by; the 
operating carrier to accounts Nos. 392 to 4(fe, inclusive, shall be iu- 
duded in this account. [This note cancelled Aug. 1, 1925.] 




Appendix B 


2S7 


392. TRAIN ENGINEMEN. 

This account shall include the pay of steam locomotive engineers 
and firemen while engaged in transportation train service or while 
deadheading in connection therewith and pay of such enginemen en- 
gaged in piloting trains over home lines; also the pay of employees 
while regularly engaged in shoveling coal forward on locomotive 
tenders. 

Note. — The pay of enginemen on locomotives engaged in more 
than one class of service shall be apportioned on the basis of service 
rendered. Pay of enginemen on train locomotives while engaged 
in train switching service shall be included in this account. The pay 
of enginemen on locomotives engaged in work service shall be in- 
cluded in the cost of the work to which the service pertains. 

393. TRAIN MOTORMEN. 

This account shall include the pay of motormen while engaged in 
running other than steam locomotives and cars in transportation train 
service or while deadheading in connection therewith; also the pay 
and expenses of motormen while engaged in piloting trains or cars 
over home lines. 

Note. — The pay of motormen on locomotives engaged in more than 
one class of service shall be apportioned on the basis of service ren- 
dered. Pay of motormen on train locomotives while engaged in train 
switching service shall be included in this account. The pay of motor- 
men on locomotives engaged in work service shall be included in the 
cost of the work to which the service pertains, 

394. FUEL FOR TRAIN LOCOMOTIVES. 

This account shall include the cost, delivered on locomotive tenders, 
of coal, coke, oil, wood, and other fuel consumed by locomotives in 
transportation train service, including a suitable proportion of the 
pay of fuel agents, fuel inspectors, fuel weighers, and clerks engaged 
in accounting for fuel at fuel stations; pay of foremen and other 
fuel station employees; also a suitable proportion of the cost of 
tools, such as wheelbarrows, shovels, scoops, and picks, used for 
handling fuel at such stations, and the cost of operating machinery 
at fuel stations. 

Note A.— The cost of repairs and renewals of coal chutes, buggies, 
pockets, air hoists, mechanical hoists, and mechanical conveyors shall 
be charged to account No, 233, **Fuel stations.” 

Note B. — The entire cost of supplies consumed by train locomotives 
in train switching service shall be included in the accounts provided for 
train service. The supplies consumed by locomotives in work service 
shall be included in the cost of the work to which the service pertains. 

395. TRAIN POWER PRODUCED. 

This account shall include the cost of producing and distributing 
electric power for the propulsion of electric locomotives and cars in 
transportation train service. 



258 Analysis of Railroad Operations 

Employees.— The pay of employees engaged in operating electric- 
power stations and substations, such as engineers, firemen, electricians, 
dynamo men, oilers, cleaners, and coal passers. 

Fuel.— The cost of coal, oil, gas, and other fuel, including the cost 
of labor unloading or stocking fuel. 

Water.— The cost of water used to produce steam or to operate 
water plants, including pumping, rent of ponds, streams, and pipe 
lines ; also water tests, boiler compounds, and other like supplies and 
expenses. 

Other supplies and expenses. — The cost of lubricants, such as oil 
and grease, used in lubricating engines, shafting, dynamos, and 
pumps; cost of waste, carbon brushes, fuses, lamps, and other sup- 
plies; also cost of heating and lighting power plants, and other ex- 
penses not elsewhere specified in connection with operation of electric- 
power plants. (See special instructions, section 12.) 

Note. — The entire cost of supplies consumed by train locomotive in 
train switching service shall be included in the accounts provided 
for train service. The supplies consumed by locomotives in work 
service shall be included in the cost of the work to which the service 
pertains. 

396. TRAIN POWER PURCHASED. 

This account shall include the cost of electric power purchased for 
the propulsion of locomotives and cars in transportation train service. 

, Note. — ^The entire cost of supplies consumed by train locomotives 
i6:iftrain switching service shall be included in the accounts provided 
for train service. The supplies consumed by locomotives in work 
service' shall be included in &e cost of the work to which the service 
pertains, 

397. WATER FOR RAIN LOCOMOTIVES. 

This account shall include the cost of water supplied to locomotives 
in transportation train service, including rent of ponds, lakes, other 
sources of water supply, and right of way for pipe lines; cost of 
water purchased, expenses of supply trains while engaged in hauling 
water for locomotive supply, and cost of testing water; also cost of 
labor expended and cost of material and supplies used in the operation 
of water stations and purifying plants. 

The cost of operating boilers, engines, and pumps at water stations, 
heating and lighting water stations, breaking ice in water tanks, 
thawing out tank spouts and water cars, keeping fires in tanks and, 
water cars to prevent freezing, shoveling snow into locomotive tanks; 
also temporary connections between water cars and locomotive tenders, 
compounds injected into locomotive boilers to decrease scale forma- 
tion, and other expenses directly incident to the supplying of water 
to such locomotives, shall be included in this account. 

An equitable proportion of the pay and the office, traveling, and: 
other expenses of superintendent of water service, engaged in connec- 
tion with water supply for locomofives,. shall be kicluded m this 
account 



259 


Appendix B 


XTXUS OF WATEt STATION SOFPUES. 


(See special instructions, section 22.) 


Axes. Gasoline drums. 

Boiler compounds. Hand n>ol3. 

Chemicals. Hose. 

Coal. Oil. 

Coal picks* Rubber packing. 

Engine igniter batteries. Shovels. 
Gasoline. Siphons. 


Slice bars. 
Stove fixtures. 
Stoves. 

Waste. 

Wrenches. 


Note. — The entire cost of supplies consumed by train locomorives 
in train switching service shall be included in the accounts provided 
for train service. The supplies consumed by locomotives in work 
service shall be included in the cost of the work to which the service 
pertains. 

398. LUBRICANTS FOR TRAIN LOCOMOTIVES. 

This account shall include the cost of valve, engine, car, and other 
lubricating oils, grease, compounds, and waste used for lubrication 
of locomotives in transportation train service. 

Note. — The entire cost of supplies consumed by train locomotives in 
train switching service shall be included in the accounts provided for 
train service. The supplies consumed by locomotives in work service 
shall be included in the cost of the work to which the service pertains. 

399. OTHER SUPPLIES FOR TRAIN LOCOMOTIVES. 

This account shall include the cost of supplies other than fuel, 
water, and lubricants, including the cost of repairs and renewals of 
furniture, tools, and other movable articles required for use on locomo- 
tives in transportation train service. 

The cost of sand charged to this account shall include the cost of 
material and supplies used in preparing and drying the sand for use, 
such as the cost of fuel, wheelbarrows, shovels, and sand screens. 


ITEMS OF TOOLS AND SUFFIXES. 

(See special icstructloxis, section 22.) 


Ash hoes. 

Hose (not air-brake, or 

Sand, 

Ash-pan rods. 

air-signal, or steam). 

Sawa 

Axes. 

Hose, thaw-out. 

Scoopa 

Bars, buggy. 

Hose reela 

Shovela 

Bell corda 

Ice. 

Signal lampa 

Boxes, portable. 

Jacka 

Sledgea 

Brooma 

Jackscrews. 

Slice bara 

Brusbea 

Lanterns and parts. 

Soap. 

Buckets. 

Locks for portable boxea 

Switch ebatna 

Carbide for acetylene gas. 

Matchea 

Switch polea 

Carbons for electric lights. 

Oil cana 

Switch ropes. 

Chimneys for headlights. 

Oil for headlighta 

Tool boxes, portable. 

Chimneys for signal lampa 

Oil for lantema 

Torches. 

Chisela 

Oil for signal lamps. 

Torpe<ioes, 

Clinker hooka 

Oil for torchea 

Waste, 

Crowbars. 

Oilera 

W'ater buckets. 

Files. 

Packing, fiber. 

Water coolers. 

First-aid boxea 

Packing, rubber. 

Wicks for headlighta 

Flaga 

Packing books. 

Wicks for lanterns. 

Globes for lanterns. 

Packing spoons. 

Wicks for signal lampa 

Grate shakera 

Picks, coal; 

Wicks for torchea 

Hammers. 

Pinch bara 

Wrecking froga 

Handsawa 

Plugging bara 

Wrenchea 


Pokena 




26 o Analysis of Railroad Operations 

Note A.— Where the quantity of sand used on locomotives engaged 
in train service is relatively small as compared with the quantity used 
by locomotives engaged in yard service, the entire cost of such material 
shall be included in account No. 387, “Other supplies for yard locomo- 
tives,*’ Where the quantity used in train service is relatively large, 
^e entire cost shall be included in this account. 

Note B. — The entire cost of supplies consumed by train locomotives 
in train switching service shall be included in the accounts provided 
for train service. The supplies consumed by locomotives in ‘work 
service shall be included in the cost of the work to which the service 
pertains. 

400. ENGINEHOUSE EXPENSES— TRAIN. 

This account shall include the expense of caring for and preparing 
locomotives for transportation train service, including a proportion of 
such expenses as are common to train, yard switching, and work 
service. 

Enginehouse men. — The pay of enginehouse employees engaged 
in wiping, cleaning, watching, and dispatching locomotives; preparing 
and keeping fires, dumping ashes, washing boilers, cleaning fire boxes, 
packing driving boxes and truck boxes; cleaning smokestacks, air- 
brake equipment, and front ends of locomotives; checking locomotive 
tool equipment, cleaning ash and cinder pits; operating turntables, 
drying sand, inspecting smokestacks and ash pans; and moving loco- 
motives around engine yards when operated by hostlers; also a pro- 
portion of the pay of enginehouse foremen and their clerks. 

Miscellaneous expenses. — The cost of tools and supplies and 
sundry expenses on account of caring for and preparing locomotives 
at engine houses. 


ITSMS 07 HXSCELLAITEOUS EXPENSES. 


(See special instruction^ section 22.) 


Boiled oil. 

Compounds for cleaning and polishing. 
Gas, oil and electricity for lighting. 
Heating enginehouses, including offices. 
Lampblack. 

Lanterns used by enginehouse men. 
Lighting enginehouses, including offices. 
Lubricating oil. 

Lye, 

Packing tools. 

Paint for front ends of locomotives. 


Power for operation of turntables and 
transfer tables. 

Kent of roundhouse stalls 
Shovels. 

Signal lights on transfer tables and 
turntables. 

Waste. 

Water for cinder pits. 

Water for washing boilers. 

Water hose. 

Wheelbarrows. 


Note A, — Enginehouse expenses of locomotives in work service 
shall be included in the cost of the work to which the service pertains. 

Note B. — The pay of mechanics and laborers engaged in locomotive 
repair work in enginehouses shall be charged to the appropriate ac- 
counts for locomotive repairs. 

401. TRAINMEN. 


This account shall include the pay of conductors ; of train auditors, 
ticket collectors, and others engaged in lifting or examining authorities 
for transportation; and of baggagemen,, brakemen, flagmen, 




26 z 


Appendix B 

porters, train guards, train stenographers, maids, and other train 
employees while engaged in transportation train service or while 
deadheading in connection therewith; also the pay of trainmen while 
engaged in piloting trains over home lines. 

Note. — ^The pay^ of trainmen while engaged in work-train service 
shall be included in the cost of the work to which the service pertains. 

402. TRAIN SUPPLIES AND EXPENSES. 

This account shall include miscellaneous expenses of transportation 
service trains and the cost of all supplies other than locomotive 
supplies. 

Cleaning cars. — The cost of cleaning and disinfecting passenger 
and freight cars in transportation train service, including cost of re- 
moving from freight-train cars such refuse material as sawdust, hay, 
and straw. 

ITEMS OF SERVICE AND SVPPUE5. 

(See special instructions, section 22.) 

Brooma Disinfecting machines. Soapw 

Brushes. Fuel for heating water. Sponges. 

Cleaning compounds. Hose and fixturea Water. 

Compressed air. Labor of employees. 

Disinfectants. Polishing compounda 

Heating cars.— The cost of heating cars in transportation train 
service, including cost of operating steam-heating plants for car heat- 
ing at stations and yards. 


ITEMS OF SERVICE AND SUPPLIES. 

(See special instructions, section 22.) 

Connections between steam heating lines Labor of employeea 
and cara Removal of asbes from car stovea 

Fuel. Stoves temporarily in freight cara 

Lighting cars.— The cost of lighting cars in transportation train 
service, including the cost of filling and cleaning lamps and of operat- 
ing plants for supplying gas or electricity lor lighting purposes. 


Battery renewala 
Candlea 
Chimneys. 
Electricity. 

Gas. 


ITEMS OF SERVICE AND SUPPLIES, 


(See special instructions, section 22.) 


Gas mantlea 
Globea 

Hose and eonnectiona 
Incandescent lamp bulba 
X.afaor of employeea 


Lamp carbons. 
Oil. 

Shadea 

Wicks. 


Note.— Repairs of gas lighting and electric lighting plants shall be 
included in the proper maintenance accounts. Repairs and renewals of 
electric lighting equipment of cars, except supplies as above provided, 
shall be included in the appropriate car-repair account. 

Lubricating cars.— The cost of lubricating cars in transportation 
train service, including cost of inspecting, repacking, and oiliiig car 
journal boxes and air-brake equipment 



Analysis of Railroad Operations 

ITEMS OF SERVICE AND 8UPPUES. 

(See special instructions, section 22*) 

Cotton waste. Oil, grease, and other Packing irons. 

Grease buckets. lubricants. Packing, miscellaneous. 

Labor of employees. Packing buckets. Wool waste. 

Oil cans. Packing hooks. 

Icing and watering cars. — The cost of icing and watering cars in 
transportation train service, including icing cars for refrigeration pur- 
poses. Credits shall he made to this account for refrigeration charges 
collected from other companies and individuals. 

ITEMS OF SERVICE AND SUPPLIES. 

(See special instructions, section 22.) 

Buckets. Ice tools. Salt 

Hose and fixtures. Labor of employees. Water. 

Zee. Ladders. 

Detouring trains. — The compensation for temporary use of tracks 
of other carriers, including the cost of pilot service, on account of 
wrecks, washouts, landslides, snow blockades, and other defects of 
the tracks, bridges, or tunnels on the carrier’s line. 

Train supplies. — The cost of supplies furnished for use on cars in 
transportation train service. 

ITEMS OF TRAIN SUPPLIES. 


(See special instructions, section 22.) 


Axes. 

Hammers. 

Shovels. 

Badgesi 

Hatchets. 

Signal boxes. 

Beds. 

Jacks. 

Signal lamps (rear). 

Bell cords. 

Lamp boards. 

Sledges. 

Boxes for trainmen. 

Lamp stocks. 

Soap. 

Brooms. 

Lantern globes. 

Switch chains. 

Brushes. 

Lantern parts. 

Switch ropes. 

Chains. 

Lanterns. 

Toilet paper. 

Chairs for cabooses (not 

Matches. 

Torpedoes. 

permanently attached). 

Medical boxes. 

Towels. 

Cold chisels. 

Oil for lanterns. 

Train tool boxes. 

Combs. > 

Order hoops. 

Uniform trimmings. 

Conductors* punches. 

Padlocks. 

Uniforms. 

Cuspidors. 

Pails. 

Ventilator sticks. 

Drinking cups and glasses. 

Punches. 

Waste. 

Fire buckets. 

Sawdust. 

Water buckets. 

Flags. 

Saws. 

Wrecking frogs. 

Fuses. 

Scoops. 

Wrenches. 


Other expenses. — The cost of miscellaneous supplies required to 
equip trains for transportation service and miscellaneous expenses 
incident to operation of such trains. 

ITEMS OP EXPENSE ON ACCOUNT OP EMPLOYEES, 

(See special instructions, section 22.) 

Apparatus for testing the sight and hearing of engxnemen and trainmen. 
Employees* reading and bunk room expense, including pay of attendants and 
supplies furoii^ed. 

Laundry work. 

Physicians* fees for examination of train employees. 

Wages paid to superintendents and secretaries of reading rooms. 



263 


Appendix B 

ITEMS OF EXPENSE ON ACCOUNT OP TRANSPORTATION. 

(See special instructions, section 22.) 

Bedding for stock cars. 

Boarding and slatting box and stock cars for carrying coal, coke, and other 
freight. 

Boards for flooring fruit cars. 

Chains for securing loads. 

Cleaning, trimming, and Ailing trainmen’s lanterns and rear signal lamps. 
Coupling and uncoupling cars at terminals. 

Disinfecting cars. 

Dunnage used in loading cars or fltting cars for freight shipments. 

Feed for live stock in snow-bound or otherwise delayed trains. 

Flowers and plants for cars. 

Laundry for revenue service cars other than for dining and buifet service and 
sleeping car service. 

Occasional turning of engines on Y of other carriers. 

Oil and other supplies for locomotives hauled as freight. 

Periodicals for use of passengers on trains. 

Planking cars for billet shipments and other material. 

Provisions, supplies, or board for passengers in delayed trains. 

Removing advertisements from cars. 

Rent of fare registers in cars. 

Safety chains for use between twin and triple cars. 

Supplies for parlor and chair cars. 

Supplies furnished cars for the purpose of protection against accidents and fires. 
Temporary grain doors. 

Temporary lining of cars for freight shipments and stoves and heaters to prevent 
freezing. 

Temporary openings in cars for freight shipments. 

Temporary racking of cars for handling sugar-cane, com, hark, or cordwood. 
Transferring passengers, express matter, baggage, mail, and freight on account 
of defective tracks, bridges, or tunnels. 

Note. — ^The expenses of operating sleeping, dining, and buffet ear features of 
train service shall be included in the account No. 403, “Oficrating sleeping cars,** 
or in account No. 441, ’’Dining and buffet service,*’ as may be appropriate, 

33. OPERATING SLEEPING CARS. 

This account shall include the cost of operating sleeping car service 
on trains. 

Superintendence.— The pay of officers directly in charge of operat- 
ing sleeping car service; the pay of their clerks and office attendants; 
also the office, traveling, and other expenses of such officers and eni'^ 
ployees. 

Station employees.— The pay and expenses of local agents, ticket 
agents, cashiers, clerks, and attendants; also the office and other ex- 
penses of such employees. 

Station expenses.— The expenses of fuel, water, steam, and sup- 
plies used in heating station offices ; gas, oil, electric current, and other 
supplies for lighting ; repairs and renewals of station furniture, and 
all other station expenses connected with sleeping car service when 
separable from the station expenses chargeable to account No, 376, 
“Station supplies and expenses,” 

Conductors.— The pay of conductors employed on sleeping cars. 
Porters and maids.— The pay of porters and maids employed on 
sleeping cars. 



264 Analysis of Railroad Operations 

Car supplies. — The cost of miscellaneous supplies used on sleeping 
cars, such as combs, brushes, brooms, and toilet paper ; also uniforms, 
caps, and service stripes for employees. 

Laundry. — Expenses for laundry work, such as laundering sheets, 
pillow-cases, towels, blankets, etc. 

Other expenses. — The cost of flowers and plants, heating cars, 
cleaning the interior of cars, and of supplies used in interior clean- 
ing, rent and cost of supplies for rooms furnished for sleeping car 
service employees, and such other expenses in connection with the 
operation of sleeping cars as are not provided for elsewhere. 

Note. — ^When officers have immediate supervision over sleeping car 
service and other operations their pay, office, and other expenses, 
as also the pay, office, and other expenses of their assistants, clerks, 
and office attendants, shall be equitably apportioned to the accounts 
appropriate to the operations over which they have supervision. 

404. SIGNAL AND INTERLOCKER OPERATION. 

This account shall include the cost of operating signals and inter- 
lockers other than those solely or principally used for governing all 
movements of locomotives and trains between main and yard tracks, 
movements of locomotives between yard tracks and enginehouses, 
and yard switching movements. 

Labor. — ^The wages of employees engaged in operating signals and 
interlockers or power producing plants in connection therewith, such 
as switch tenders, signalmen other than telegraph operators, lever 
men, switch and signal oilers, battery men, lamp men, lamp cleaners, 
and lamplighters; gatemen at crossing of other railroads, engineers 
and others operating plants furnishing compressed air for signals 
and interlocks; engineers, electricians, and others operating plants 
furnishing electric power for signals and interlockers. 

Supplies. — The cost of supplies used in operating signals and 
interlockers or in signal offices, such as gasoline, vitriol, battery zincs, 
battery coppers, lubricating oils, fuel for heating, fuel for power 
purposes, produced and purchased power used in operating switches 
and signals, furniture repairs and renewals, water, and light. 

Note. — The cost of operating signals and interlockers solely or 
principally used for governing the movement of yard locomotives 
and trains shall be included in the appropriate yard expense accounts. 

405. CROSSING PROTECTION. 

This account shall include the pay of street and highway crossing 
gatekeepers and flagmen, the cost of supplies used by them, the cost 
of lights at street and highway crossings hot a part of the lighting 
outfit at stations or in yards, and the cost of compressed air for 
operating gates. 



Appendix B 265 

406. DRAWBRIDGE OPERATION. 

This account shall include the cost of operating drawbridges. 

Labor. — The wages of employees engaged in operating drawbridges, 
such as bridge engineers, tenders, and watchmen. 

Supplies.— T he cost of produced and purchased power and of 
supplies, such as fuel, oil, lanterns, water, waste, boats, stoves, 
chairs, brooms, and pails used in drawbridge operation. 

407. TELEGRAPH AND TELEPHONE OPERATION. 

This account shall include the cost of telegraph and telephone op- 
eration not provided for elsewhere. 

Superintendence— Telegraph.— The pay of superintendents of tele- 
graph, telegraph censors, their clerks, and attendants. 

Telegraph operators and messengers. — The pay of telegraph op- 
erators, block inspectors, and messengers in telegraph and relay offices 
other than those employed in dispatching trains and those located 
in general offices or at stations. 

Other telegraph expenses.— O ffice, traveling, and incidental ex- 
penses, including office rent, of employees whose pay is chargeable to 
this account; rent of telegraph conduits, lines, and poles; cost of 
battery renewals and supplies, bicycles for messengers, and electric 
current for telegraph purposes; also excess payments to telegraph 
companies when in connection with telegraph service and not provided 
for elsewhere. 

Note A. — The pay, rent, other office expenses, and traveling ex- 
penses of superintendents of telegraph, their assistants, clerks, and 
attendants, when engaged both in maintaining and operating telegraph 
lines, shall be apportioned equally between this account and account 
No. 247, ^Telegraph and telephone lines.^’ 

Superintendence— Telephone,— T he pay of superintendents of 
telephone, their clerks, and attendants. 

Telephone operators and messengers.— T he pay of telephone op- 
erators and messengers in telephone offices other than those employed 
in dispatching trains and those located in general offices or at stations. 

Other telephone expenses.— ‘Office, traveling, and incidental ex- 
penses, including office rent, of employees whose pay is chargeable 
to this account; rent of telephone conduits, lines, and poles; cost of 
battery renewals and supplies, bicycles for messengers, and electric 
current for telephone purposes; also excess payments to telephone 
companies when in connection with telephone service and not provided 
for elsewhere. 

Note B.— The pay, rent, other office expenses, and traveling ex-, 
penses of superintendents of telephone, their assistants^ clerkSf and 
attendants, when engaged both in maintaining and operating telephone 
lines, shall be apportioned equally between this account and account 
No. 247, “Telegraph and telephone lines.*^ 



266 Analysis of Railroad Operations 

408. OPERATING FLOATING EQUIPMENT. 

This account shall include the cost of operating floating equipment 
in water transfer service (ferriage, lighterage, and floatage). (See 
general instructions, section 1.) 

Superintendence. — The pay of vice presidents and other officers di- 
rectly in charge of or engaged in the operation of boats; the pay of 
their assistants, clerks, and attendants; also the office, traveling, and 
other expenses of such officers and their employees. 

Wages of crews. — The pay of captains, pilots, chief officers, mates, 
sailors, wireless telegraph operators, and other employees of the deck 
department; engineers, assistant engineers, electricians, oilers, firemen, 
coal passers, and all other employees of the engineer's department; 
and pursers, porters, and all other employees in the steward's depart- 
ment, except when engaged in dining and buffet service. 

Fuel. — The cost, on board boats (including the cost of trimming) 
of coal, oil, wood, and other fuel used for generating power, heat, 
or light. 

Lubrication. — The cost of oil, grease, tallow, graphite, and other 
material furnished for lubricating purposes. 

Other supplies and departmental expenses. — The cost of supplies 
furnished to deck department ; the incidental expenses of deck depart- 
ment employees; supplies other than fuel and lubricants, furnished 
the engineer’s department; water furnished to boats; incidental ex- 
penses of engineer’s department employees ; supplies (other than dining 
and buffet supplies) furnished to the steward’s department; laundry 
for boats ; and incidental expenses of steward’s department employees 


ITEMS OF SUPPLIES. 

(See special instructions, section 22.) 


Axes. 

Hose. 

Ropes. 

Brooms. 

Ice. 

Shovels. 

Brushes. 

Lamps. 

Soap. 

Commissarial supplies. 

Laundry. 

Tallow. 

Flags, 

Lines. 

Tools, miscellaneous. 

Gas. 

Mops, 

Trucks. 

Globes. 

Oil. 

Waste, 

Grease. 

Pails. 

Water, 

Handspikes, 

Flanks. 

Wicks. 

Hatchets. 

Provisions. 

Wrenches. 


Other expenses. — Expenses incident to the operation of floating 
equipment not otherwise provided for in this account 

ITEMS OP EXPENSE. 

(See special instructions, section 22.) 

Customhouse fees. Transferring passengers in case of 

License fees. accidents. 

Pumping out boats laid up. Wharfage. 

Eaising sunken boats. 



Appendix B 267 

Elevation and tx)ngshohe laeor.— The cost of short labor in con- 
nection with loading and unloading lighterage freight at wharves and 
piers, such as labor of bridgcmen at transfer bridges and of watch- 
men, longshoremen, stevedores, and other wharf men. 

Elevation and shore expenses. — Shore expenses in connection with 
loading and unloading lighterage freight, such as the cost of steam 
and electricity for power, heating, and lighting; power and supplies 
used for transfer or float bridges; supplies used in connection with 
operating wharves and piers and not chargeable to account No, 376, 
"Station supplies and expenses/' 


Brooms. 

Carbons. 

Chalk. 

Coal hods. 
Coal shovels. 
Cold chisels, 
Crowbars, 
Gas. 

Hammers. 

Hatchets. 

Ice. 

Ice tongs. 


ITEMS OF SUPPLIES. 


(See special instructions, section 22 .) 


Incandescent lights. 
Lamps, reflector. 
Lanterns. 

Marline. 

Matches. 

Oil. 

Oil cans. 

Pails. 

Pinch bars. 

Ropes. 

Salt. 

Scoops. 


Shovels. 

Soap. 

Tacks. 

Tallow, 

Torches. 

Towela 

Twine. 

Waste. 

Water. 

Water coolers. 
Whcelbarrowa 


Note A. — ^When the compensation for the use of floating equipment 
used in water transfer service includes rent, maintenance, and opera- 
tion, the portion covering rent shall be charged to income account No. 
539, "Rent for floating equipment," the portion covering maintenance 
shall be charged to the appropriate account for maintenance of equip- 
ment, and the portion covering operation shall be included in this 
account. 

Note B,— 'The cost of labor expended in transferring freight be- 
tween cars and boats shall be distributed in, such manner as to include 
in account No, 373, "Station employees," the expense of handling be- 
tween the cars and the string piece of the wharf or rail of the boat, 
and to include in this account the expense of handling upon the boats, 


409. EXPRESS SERVICE. 

This account shall include the cost of operating express service. 

Drivers and messengers.— Pay of express messengers, drivers, and 
helpers, and cost of their uniforms, uniform trimmings, and badges; 
and pay of baggage-masters handling express. 

Other expenses.— Pay of stablemen in express service, rent of 
stables, and expense of feeding and shoeing horses. 

410. STATIONERY AND PRINTING. 

This account shall include the cost of stationery and printing used 
in connection with rail line transportation, including operation of 
floating equipment. 



268 


Analysis of Railroad Operations 

STATIONERY AND PRINTING ITEMS. 


(See Special instructions, section 22.) 


Adding machines. 

File boxes, paper. 

Phonographs and records. 

Addressographs and sup> 

Forms, blank and printed. 

Pins. 

plies. 

Fuel tickets. 

Postage. 

Arm rests. 

Glass pens. 

Punches (not conductors' 

Baggage checks, printed. 

Hectographs. 

or baggagemen’s). 

Baggage scrip. 

Indexes. 

Rubber bands. 

Baggage storage checks. 

Ink for writing and draw- 

Rubber stamps. 

Bills of lading. 

ing. 

Rulers. 

Binders. 

Inkstands. 

Ruling pen^ 

Blank books. 

Invoice books. 

Scrapbooks.' 

Blotters. 

Legal cap paper. 

Sealing wax. 

Blotting paper. 

Letter paper. 

Seals. 

Bristol board. 

Manifold paper. 

Shears. 

Calculating machinea. 

Manifold pens. 

Shipping orders. 

Calendars. 

Mileage books. 

Shipping tags. 

Carbon paper. 

Mimeographs. 

Shorthand notebooks. 

Cardboard. 

Mucilage. 

Sponge cups. 

Cards, blank and printed. 

Mucilage brumes. 

Sponges. 

Circulars. 

Neostyles. 

Stamps, impression. 

Computing tables. 

Note paper. 

Stylographs. 

Conductors* hat checks. 

Notices. 

Tablets blank and printed. 

Copy (impres^on) books. 

Numbering stamps. 

Tape. 

Copying brushes. 

Oil paper. 

Telegraph blanks. 

Copying presses. 

Paper. 

Ticket stamps. 

Crayons. 

Paper baskets. 

Tickets. 

Cross-section books. 

Paper clips. 

Time-tables (employees). 

Cross-section paper. 

Paper cutters. 

Tissue (impression) paper. 

Cyclostyles. 

Paper fasteners. 

Tracing cloth. 

Dating stamps and ribbons. 

Paper files. 

Tracing paper. 

Delivery tickets. 

Paper weights. 

Twine. 

Dictaphones. 

Papyrographs. 

Typewriters and ribbons. 

Dictographs. 

l^archraent paper. 

Wage tables. 

Drawing paper. 

Pencil sharpeners. , 

Wastebaskets. 

Duplicators. 

Pencils for writing and 

Water colors. 

Electric pens; 

drawing. 

Water holders. 

Envelopes. 

Penholders. 

Waybills, 

Erasers, rubber and steel. 

Penracks. 

Wrapping paper. 

Eyelet punches. 

Pens for writing and 

Wringers for copying 

Eyelets. 

drawing. 

presses. 


Note. — The cost of dictionaries, periodicals, technical books, etc,, 
shall be included in appropriate superintendence accounts, and city 
directories and books of reference used by station agents shall be 
chained to account No. 376, “Station supplies and expenses,” 

411. OTHER EXPENSES. 

This account shall include all expenses in connection with rail line 
transportation not properly chargeable to other transportation accounts. 

ITEMS OF EXPENSE. 

(See special instructions, section 22.) 

Amounts paid for switching empty cars otherwise than in connection with 
loaded movements or with the repairs to the equipment. 

Amounts paid on account of bills of lading issued on fraudulent receipts. 
Amounts paid to suspended transportation department employees covering periods 
of suspension. 

Compensatioti for property loss incident to failure to stop at station to pick up 
passengora. 



Appendix B 269 

Demurrage accruing on a foreign line of reason of error of carrier's agent 
Extra drayage due to agent's error in routing interline shipment. 

Fees paid arbitrators in wage disputes of transportation department employees. 
Loss of station funds by burglary, when not covered by insurance. 

Lross of train collections in holdup. 

Overcharges paid foreign lines on account of error of the carrier’s agent in 
routing and billing. 

Pay and expends of transportation department employees attending conferences 
with oSicers in connection with wage disputes. 

Payments for switching on account of cara not passing inspection at junction 
points. 

Penalties imposed under reciprocal demurrage laws for failure to furnish cars. 
"Penalty switching” payments on account of improper delivery of cars to other 
carriers. 

412. OPERATING JOINT TRACKS AND FACILITIES~DR. 

This account shall include the carrier's proportion of the transporta- 
tion expenses incurred by others in the operation of joint tracks, 
inter lockers, and other facilities which are not provided for in ac- 
count No. 390, ‘^Operating joint yards and terminals — Dr.'' 

Note A.— The purpose of this account is to show the amount accru- 
ing against the carrier for its proportion of the cost of operating 
tracks and facilities (other than at joint yards and terminals) oper- 
ated by others and in the joint use of which the carrier participates. 
(See special instructions, section 9.) 

Note B. — No proportions of items of expense chargeable by the 
operating carrier to accounts Nos. 392 to 402, inclusive, shall be 
included in this account. 

413. OPERATING JOINT TRACKS AND FACILITIES-CR. 

This account shall include amounts chargeable to others as their 
proportions of transportation expenses incurred by the carrier in 
the operation of joint tracks, interlockers, and other facilities which 
are not provided for in account No. 391, '‘Operating joint yards and 
terminals — Cr," 

Note A. — The purpose of this account is to show the amounts 
accruing in favor of the carrier and against others for tlieir propor- 
tions of the cost of operating tracks and facilities (other than at 
joint yards and terminals) operated by the carrier and in the joint 
use of which others participate. (See special instructions, section 9.) 

Note B (as amended Aug. 1, 1925)— No proportions of items of ex- 
pense chargeable by the operating carrier to accounts Nos. 392 to .402, 
inclusive, shall be included in this account except such expenses 
pertaining to the operation of transportation train service for the 
joint benefit of two or more carriers. 

414. INSURANCE. 

This account shall include premiums, except reinsurance premiums, 
for insuring the carrier against loss through injuries to persons 
or damage to or destruction or loss of property, whether caused 
by fire, accident, or other cause, when such loss to the carrier would 
be chargeable to Transportation— Rail Line ; also premiums on fidelity 
bonds of employees whose pay is chargeable to Transportation— Rail 
Line. (See special instruction, section 18.) 



270 Analysis of Railroad Operations 

Note. — ^The premiums paid by the carrier to its insurance fund 
shall be credited to an insurance reserve account, to which account 
shall be charged the amount of all claims for injuries to persons 
and damages to the property covered by its insurance. To sudi 
account shall also be charged all reinsurance premiums paid to in- 
surance companies, and to it shall be credited all amoimts recovered 
from insurance companies for damage to property reinsured by them. 

415. CLEARING WRECKS. 

This account shall include the cost of clearing wrecks other than 
wrecks of work trains. 

Labor. — ^The wages of employees while engaged in connection with 
wrecking service, loading, and transferring contents of wrecked cars, 
building temporary tracks around wrecks, and removing such tracks. 

Train service. — The cost of train service in connection with 
replacing wrecked equipment upon the tracks and transporting such 
equipment to shops for repairs, including amounts paid to other com- 
panies for service of locomotives, derricks, and other equipment 
and for wages of crews in wrecking service. 

Other supplies and expenses. — Payments for reloading or trans- 
ferring freight, express, baggage, and mail; transferring passengers, 
and cost of provisions or board for men clearing up or watching at 
wrecks. 

Note A. — Expenses of clearing wrecks of work trains shall be 
included in the cost of the work in connection with which the 
wrecked train was engaged. 

Note B. — The cost of restoring roadbed and tracks to original 
condition after wrecks and the cost of repairing equipment damaged 
or destroyed by wrecks shall be charged to the appropriate accounts 
for maintenance of way and structures and maintenance of equipment. 

Note C. — That proportion of payments to other companies for 
use of locomotives, derricks, and other equipment in wrecking service 
which represents rent shall be included in the income accounts. 

416. DAMAGE TO PROPERTY. 

This account shall include payments and expenses on account of 

damages to the property of others, whether by fire, collision, fllood, 
or other cause, with the exception of payments and expenses on 
account of damage to property intrusted to the carrier for trans- 
portation, and for damage to stock on right of way. It shall include 
also fines or compensation paid for interference with the business 
of others, as by detention of vessels at drawbridges, or by blocking 
streets. 

This account shall include also the pay, office rent, and office, 
traveling, and other expenses of employees and others engaged as 
claim adjusters or as witnesses in lawsuits in connection with damage 
to property cases, or engaged in detection of thieves; notarial fees 
paid in connection with such cases; and payments for or repairs 
of damage to equipment of other carriers, or to property contained 
therein, such carriers having trackage rights upon or grade crossings 
over the carrier's tracks. 



Appendix B 271 

Note A. — Damage to live stock on right of way, and damage to 
freight and baggage intrusted for transportation, are provided for 
under accounts No. 417, “Damage to live stock on right of way”; 
No. 418, “Loss and damage— Freight” ; and No. 419, “Loss and damage 
— Baggage.” 

Note B.— Expenses incident to suits growing out of damage to 
property claims, not otherwise provided for, shall be included in ac- 
count No. 454, “Law expenses.” 

Note C — ^The pay, office rent, and the traveling, office, and other 
expenses of claim adjusters, claim clerks, and others engaged in 
claim matters when not accurately assignable to a distinct class 
of claims, shall be apportioned equally^ among the several classes of 
claims over which they have jurisdiction or in connection with 
which they are engaged. This provision does not apply to the 
p^ and expenses of general officers or general office or general 
office employees whose pay is includible in general account VII, 
General. 

417. DAMAGE TO LIVE STOCK ON RIGHT OF WAY. 

This account shall include payments on account of cattle and other 
live stock killed or injured while crossing or trespassing on the 
right of way, including cost of removing and burying the same. 

There shall be included in this account also the pay and the 
traveling, office, and other expenses of employees and others engaged 
as live-stock claim adjusters or engaged as witnesses in lawsuits in 
connection with damage to live stock on right of way; also notarial 
fees in connection with claims for damage to live stock on right 
of way. 

Note A, — Expenses incident to suits growing out of live-stock 
claims, not otherwise provided for, shall be included in account 
No. 454, “Law expenses.” 

Note B.— The pay, office rent, and the traveling, office, and other 
expenses of claim adjusters, claim clerks, and others engaged in 
claim matters when not accurately assignable to a distinct class of 
claims, shall be apportioned equally among the several classes of 
claims over which they have jurisdiction or in connection with which 
^ey are engaged. This provision does not apply to the pay and 
expenses of general officers or general office employees whose pay is 
includible in general account VII, General. 

4ia LOSS AND DAMAGE— FREIGHT, 

This account shall include payments and expenses on account of 
loss, destruction, damage, or delays to revenue freight shipments, 
including locomotives and cars transported as freight, express 
matter, milk shipments, and live stock, and expenses incurred on 
account of such payments; also expenses on account of loss, destrucr 
tion, or damage to shipments of company material. 

This account shall also include the cost of repacking and boxing 
damaged freight shipments; notarial fees in connection with freight 
claims; freight charges paid other carriers on lost, destroyed, or 
damaged shipments; pay, traveling, office, and other expenses of em* 



272 Analysis of Railroad Operations 

ployees or others engaged as freight-claim adjusters, as witnesses 
in lawsuits in connection with freight-claim cases, in selling damaged 
and unclaimed shipments, or in detecting thieves; rent of ware- 
houses used for storage of damaged and astray freight shipments, 
payments for storage of such shipments in public warehouses, and 
interest and penalties assessed for nonpayment of freight claims. 

Amounts received from the sale of astray and damaged freight 
shall be credited to this account 

Note A. — Expenses incident to suits growing out of loss and 
damage (freight) claims, not otherwise provided for, shall be included 
in account No. 4S4, ‘‘Law expenses." 

Note B. — The pay, office rent, and traveling, office, and other 
expenses of claim adjusters, claim clerks, and others engaged in 
claim matters when not accurately assignable to a distinct class of 
claims, shall be apportioned equally among the several classes of 
claims over which they have jurisdiction or in connection with which 
they are engaged. This provision does not apply to the pay and 
expenses of general officers or general office employees whose pay 
is includible in general account VII, General. 

419. LOSS AND DAMAGE— BAGGAGE. 

This account shall include payments for loss, destruction, damage, 
or delays to baggage and other personal property carried as baggage, 
and damage to personal apparel; also expenses on account of such 
loss or damage. 

This account shall also include the cost of repacking and boxing 
damaged baggage; notarial fees in connection with baggage claims; 
baggage claim payments made to other carriers on lost, destroyed, 
damaged, or delayed shipments; pay, traveling, office, and other 
expenses of employees or others engaged as baggage claim adjusters, 
as witnesses in lawsuits in connection with baggage claim cases, in 
selling damaged and unclaimed baggage, or in detecting thieves: 
rent of warehouses used exclusively for storage of damaged and 
unclaimed baggage, payments for storage of such shipments in public 
warehouses, and interest and penalties assessed for nonpayment 
of claims. 

Amounts received from the sale of astray and damaged baggage 
shall be credited to this account. 

Note A. — Expenses incident to suits growing out of loss and 
damage (baggage) claims, not otherwise provided for, shall be in- 
cluded in account No. 454, “Law expenses.” 

Note B. — The pay, office rent, and traveling, office, and other 
expenses of claim adjusters, claim clerks, and others^ engaged in 
claim matters when not accurately assignable to a distinct class of 
claims shall be apportioned equalljr among the several classes of 
claims over which they have jurisdiction or in connection with 
which they are engaged. This provision does not apply to the 
pay and expenses of general officers or general office employees 
whose pay is includible in general account VII, General. 

Note C. — When a payment on account of injuries to passengers , 
includes allowance for damage to personal apparel the damage al- 
; lowance shall be included in this account when statable; otherwise 
: , in tihe appropriate personal injury account 



Appendix B 273 

420. INJURIES TO PERSONS. 

This account shall include expenses on account of injuries to per- 
sons which occur directly in connection with transportation service, 
including damages for ejectment of passengers. 

Services of employees and others called in consultation in rela- 
tion to claim adjustments; pay and expenses of employees while 
engaged as witnesses at inquests and lawsuits, and a suitable pro- 
portion of donations made to hospitals, shall be included in this 
account. 


ITBICS OF BXPENSB. 

(See special instructions, section 22.) 


Artificial linib& 

Carriage fees. 

Qaim adjusters* and clerks^ services. 
Claim adjusters* office expenses. 
Compensation for injuries or death. 
Final judgments, including plaintilEs* 
court costs. 

Funeral expenses. 

Hospital attendance. 


Medical and surgical services. 

Medical and surgical supplies. 

Notarial fees. 

Nursing. 

Railway transportation. 

Undertakers* services. 

Undertakers* supplies. 

Witnesses* fees and expenses at inquests 
and lawsuits* 


Note A. — Expenses incident to personal injury suits, not otherwise 
provided for, shall be included in account No. 454, “Law expenses.*' 

Note B.— Amounts donated by a carrier to hospitals shall be dis- 
tributed, 25 per cent to account No. 274, “Injuries to persons*'; 25 
per cent to account No. 332, “Injuries to persons”; and 50 per cent to 
account No. 420, “Injuries to persons.” 

Note C.— The pa;r, office rent, and traveling, office, and other ex- 
penses of claim adjusters, claim clerks, and others engaged in claim 
matters, when not accurately assignable to a distinct class of claims, 
shall be apportioned equally amonp: the several classes of claims 
over which they have jurisdiction or in connection with which they are 
engaged. This provision does not apply to the pay and expenses 
of general officers or general office employees whose pay is includible 
in general account VII, General. 

Note D.— When a payment on account of injuries to persons in- 
cludes allowance for damage to personal apparel, the damage allow- 
ance shall be included in account'^ No. 419, “Loss and damage — 
Baggage,” when separable; otherwise the entire payment shall be 
included in this account, 

V. TRANSPORTATION— WATER LINE. 

The primary accounts included in this general account are designed 
to show the expenses incurred in transporting persons and property 
by water lines. 

When the compensation for the use of floating equipment used 
in water-line operations includes rent, maintenance, and operation, 
the portion covering rent shall be charged to income account No. 
539, “Rent for floating equipment,” the portion covering, mainte- 
nance shall be charged to the appropriate accounts for maintenance 
of equipment, and the portion covering operation shall be distributed 
to the primary accounts in this account. (See general instructions, 
section 1.) 



274 Analysis of Railroad Operations 

431. OPERATION OF VESSELS. 

This account shall include the cost of operating vessels in water-line 
service. 

It shall include: 

Superintendence. — The pay of vice presidents and other officers 
directly in charge of or engaged in the operation of vessels; the pay 
of their assistants, clerks, and attendants; also the office, traveling, 
and other expenses of such officers and their employees. 

Wages of crews. — The pay of captains, pilots, chief officers, mates, 
sailors, wireless telegraph operators, and other employees of the deck 
department; engineers, assistant engineers, electricians, oilers, firemen, 
coal passers, and all other employees of the engineer’s department; and 
pursuers, stewards, stewardesses, cooks, pantrymen, waiters, porters, 
and all other employees in the steward’s department. 

Fuel. — The cost, on board vessels (including the cost of trimming), 
of coal, oil, wood, and other fuel used for generating power, heat, 
or light. 

Lubrication. — The cost of oil, grease, tallow, graphite, and other 
material furnished for lubricating purposes. 

Stationery and printing. — ^The cost of stationery and printing 
used in connection with the operation of vessels. (For stationery and 
printing items, see expense account No. 410.) 

Food supplies. — ^The cost of all food supplies furnished to the 
steward’s department. 

Bar supplies.— The cost of all wines, liquors, beers, ales, mineral 
waters, cigars, cigarettes, tobacco, and other bar supplies. 

Other supplies and departmental expenses. — The cost of supplies 
furnished to deck department; the incidental expenses of deck de- 
partment employees; supplies, other than fuel and lubricants, fur- 
nished the engineer’s department; water furnished to ships; and m- 
cidental expenses of engineer’s department employees ; supplies (other 
than food and bar) furnished to the steward’s department; laundry 
for ships; and incidental expenses of steward’s department employees. 

Lay-up expenses. — The pay of crews and all other transportation 
expenses incurred on account of floating equipment when laid up and 
not undergoing repairs or betterment. 

Other expenses.— Expenses incident to the operation of vessels not 
otherwise provided for in this account. 

Note A. — When officers enumerated above have supervision over 
other departments also, their pay, office and other expenses, as also 
the pay, office and other expenses of thdr assistants, clerks, and 
attendants, shall be equitably apportioned among the departments over 
which they have jurisdiction. 

Note B. — The rent for offices and other structures of minor im- 
portance used in the operation of vessels shall be included in this ac- 
count The rent for such property of major importance^ which, is, 
ordinarily leased for a period of years, shall, be included in Income 



m 


Appendix B 

■32. OPERATION OF TERMINALS. 

This account shall include the expenses of the operation of terminals 
devoted to water-line operations. It shall include: 

Superintendence.— The pay of vice presidents and other oiEcers in 
charge of or engaged in the operation of terminals; the pay of their 
assistants, clerks, and attendants; also the office, traveling, and other 
expenses of such officers and their employees; the salaries of agents, 
clerks, and attendants; the pay of port or station agents and their 
employees; the pay of wharf employees (except stevedores and 
other laborers provided for in the subheading “Stevedore and wharf 
labor”); agency and office expenses; expenses of telegraph and 
telephone service ; postage, heat, light, power, water, ice, furniture, and 
other supplies (except stationery and printing) ; and incidental office 
and traveling expenses of port or station agents, their clerks, and 
attendants. 

Stationery and printing.— The cost of stationery and printing used 
in connection with the operation of terminals. (For stationery and 
printing items see expense account No. 410.) 

Stevedore and wharf labor.— The pay of stevedores, foremen, and 
longshoremen when engaged directly in loading and unloading vessels ; 
payments for labor in connection with handling, trimming, and stowing 
cargoes in vessels, including payments to companies and individuals 
engaged to handle cargoes by contract; and the pay of laborers on 
wharves when engaged in piling, tiering, and handling freight, and in 
unloading and loading baggage. 

Tugs and Lighters— Operation.— Expenses in connection with the 
operation of tugs, lighters, and other floating equipment employed in 
terminal operations, including superintendence, wages, fud, water, 
lubricants, food supplies, wharfage, and laborers engaged in handling 
lightered cargoes (except directly to or from ships). 

Switching, lighterage, and other transfers.— Payments made to 
other companies or individuals for lightering, switching, or transfer- 
ring freight; teaming; operating team transfers owned by the carrier; 
and other expenses in connection with the transfer of freight not pro- 
vided for in the foregoing paragraph or in revenue account No. 121, 
“Freight” 

Light, heat, power, and water.— The expenses of light, heat, 
power, and water used in the operation of terminals (except in agents’ 
or superintendents’ offices), both when purchased and when produced 
by the carrier. 

Wharf supplies and expenses.— The cost of supplies used by and 
expenses of wharf employees, such as meals furnished, advertising 
for wharf employees, cost or rent of equipment for watchmen, firemen, 
and police; uniforms for wharf employees; supplies for coopering, 
marking, and tagging freight; car standards, binders, etc.; and ex- 
penses not chargeable as repair items inddent to keying whams h 
proper conditiott 



276 Analysis of Railroad Operations 

Other EXPENSES.—Expenses incident to the operation of terminals 
not otherwise provided for in this account, including harbor master’s 
fees, quarantine expenses, customhouse and other port charges. 

Note A. — When officers enumerated above have supervision over 
other departments also, their pay, office, and other expenses, as also 
the pay, office and other expenses of their assistants, clerks, and 
attendants, shall be equitably apportioned among the departments over 
which they have jurisdiction. 

Note,,.B. — ^The rent for offices and other structures of minor im- 
portance used in the operation of terminals shall be included in this 
account. The rent for such property of major importance, which is 
ordinarily leased for a period of years, shall be included in Income. 

433. INCIDENTAL. 

This account shall include incidental transportation expenses in con- 
nection with water-line operations. It shall include: 

Loss AND DAMAGE— Freight. — Payments and expenses for loss, 
damage, delays, or destruction of freight (including company mater- 
ial) ; uncollectible freight charges paid other carriers on misrouted, 
lost, damaged, or destroyed shipments; cost of repacking and boxing 
damaged merchandise; pay and expenses of employees and others 
engaged as adjusters and in detecting thieves; and the pay and ex- 
penses of employees and others engaged as witnesses in lawsuits in 
connection with loss and damage cases. The net amount received 
from the sale of astray and damaged freight shall be credited to this 
account. 

Loss AND DAMAGE — Baggage. — Payments and expenses for loss, 
damage, delays, or destruction of baggage or other personal property 
carried as baggage, and damage to personal appare!; the cost of re- 
packing and boxing damaged baggage; and the pay and expenses of 
employees or others while engaged as adjusters and witnesses in law- 
suits in cases involving loss or damage to baggage. The net amount 
received from the sale of astray and damaged baggage shall be 
credited to this account. 

Damage to property, — Payments and expenses on account of dam- 
ages to or destruction of property of others, whether by fire, collision, 
or other cause, with the exception of payments and expenses on ac- 
count of damage to property intrusted to the carrier for transporta- 
tion; and pay and expenses of employees and others while engaged 
as adjusters and as witnesses in lawsuits arising out of damage to 
property. 

Injuries to persons.— Compensation and expenses incident to in- 
juries to persons occurring directly in connection with the transpor- 
tation operations of water lines ; a proportion of the pay and expenses 
of physicians and surgeons; of claim adjusters and clerks; expenses of 
nurses and hospital attendants; medical and surgical supplies; artificiar 
limbs ; funeral expenses ; railway, boat, and carriage fares for con- 
veying injured persons and attendants; donations or contributions 



to hospitals in which employees are cared for; pay and expenses of 
employees and others while attending coroners* inquests, while engaged 
as witnesses in law-suits in connection with personal mjury cases, or 
when called in consultation in relation to personal injury claims. 

Insurance. — Premiums paid, except reinsurance premiums, for in- 
suring the carrier against loss through injuries to persons, or damage 
to or destruction or loss of property, whether caused by fire, accident, 
or other cause, when such loss to the carrier would be chargeable to 
Transportation — Water Line; also premiums on fidelity bonds of em- 
ployees whose pay is chargeable to that account. (See special instruc- 
tions, section 18.) 

Note A. — The premiums paid by the carrier to its insurance fund 
shall be credited to an insurance reserve account, to which account 
shall be charged the amount of all claims for injuries to persons and 
damages to the property covered by its insurance. To such account 
shall also be charged all reinsurance premiums paid to msurance 
companies, and to it shall be credited all amounts recovered from in- 
surance companies for damage to proper^ reinsured by them. 

Note B.— Expenses not otherwise provided for in connection with 
the conduct of loss, damage, and personal injury suits shall be charged 
to account No. 454, **Law expenses,” but the amount of final judg- 
ments, including plaintiff’s court costs, shall be included in this account 

Note C.—The pay, office rent, and traveling, office, and other 
penses of claim adjusters, claim clerks, and others engaged in claim 
matters when not directly assignable to a distinct class of claims, 
shdl be apportioned equally among the several classes of claims over 
which they have jurisdiction or in connection with which they arc <ai- 
gaged. 

VI. MISCELLANEOUS OPERATIONS. 

The primary accounts included in this general account are designed 
to show the expenses incurred in miscellaneous operations. (Sec gen- 
eral instructions, section 4.) 

441, DINING AND BUFFET SERVICE. 

This account shall include the cost of operating dining and buffet 
service on trains and transfer boats. It shall include: 

Superintendence.— The pay of officers directly in charge of operat- 
ing dining and buffet service; the pay of their assistants, clerks, and 
office attendants; also the office, traveling, and other expenses of such 
officers and their employees. 

CoMMissARiAL EMPLOYEES.— The pay of storekeepers, assistant store- 
keepers, clerks, porters, and other employees in commissarial supply 
depots and storehouses. 

Stewards. — The pay of stewards or conductors employed on dining 
and buffet cars and transfer boats. 

Cooks and waiters.— T he pay of cooks, waiters, and assistants on 
dinmg and buffet cars and transfer boats. 



278 Analysis of Railroad Operations 

Fuel and supplies.— The cost of fuel for cooking purposes; of 
provisions, such as meats, groceries, vegetables, fish, table waters, ice, 
etc.; bar supplies, such as wines, liquors, beers, ales, etc.; cost of 
licenses; and cost of cigars, cigarettes, and tobacco. 

Laundry.— Expenses for laundry work, such as laundering table- 
cloths, napkins, aprons, etc. 

Stationery and printing. — ^The cost of stationery and printing 
used in connection with dining and buffet service. 

Other expenses. — The cost of flowers and plants; cleaning the 
interior of cars; rent and cost of supplies for rooms furnished for 
dining and buffet service employees; and such other expenses in con- 
nection with the operation of dining and buffet service as are not 
provided for elsewhere. 

Note. — ^When officers have immediate supervision over dining and 
buffet service and other operations their pay, office and other expenses, 
as also the pay, office and other expenses of their assistants, clerks, and 
office attendants, shall be equitably apportioned to the accounts appro- 
priate to the operations over which they have supervision. 

442. HOTELS AND RESTAURANTS. 

This account shall include the cost of operating hotels, restaurants, 
and lunch counters when the cost of the operated property is includible 
in the road and equipment accounts. It shall include: 

Superintendence. — ^The pay of officers directly in charge of operat- 
ing hotels, restaurants, and lunch counters; pay of their clerks and 
office attendants ; also the office, traveling, and other expenses of such 
officers. 

Employees. — The pay of stewards, hotel keepers, storekeepers, 
checkers, linen clerks, butchers, chefs, cooks, kitchen help, maids, port- 
ers, elevator men, call boys, hat and cloak attendants, waiters, wait- 
resses, laundresses, engineers, firemen, and other employees engaged in 
operating hotels, restaurants, and lunch counters. 

Fuel and supplies. — The cost of fuel for cooking and heating pur- 
poses; provisions, such as meats, groceries, vegetables, fish, table 
waters, ice, etc.; bar supplies, such as wines, liquors, beers, ales, , 
etc. ; the cost of liquor licenses ; the cost of tobacco, cigars, cigarettes, 
etc.; and miscellaneous supplies for operating the service. 

Stationery and printing. — ^The cost of stationery and printing 
used in connection with the operation of hotels and restaurants. 

Other expenses.— The cost of lighting, and other items of expense 
not otherwise provided for in this account. 

Note. — When officers have immediate supervision over hotels, 
restaurants, and lunch counters and other operations their pay, office, 
and other expenses, as also the pay, office, and other expenses of 
their assistants, clerks, and office attendants, shall be equitably ap^ . 
portioned to the accounts appropriate to the operations over which 
they have supervision. 



Appendix B 


279 


443. GRAIN ELEVATORS. 

This account shall include the cost of operating grain elevators other 
than small elevators which are classed as station facilities. It shall 
include : 

Superintendence.— T he pay of officers directly in charge of grain- 
elevator service; the pay of their assistants, clerks, and office at- 
tendants ; also the office, traveling, and other expenses of such officers 
and their employees. 

Employees. — The pay of engineers, firemen, foremen, machine men, 
oilers, millwrights, carpenters, trimmers, weighers, spout men, sweep- 
ers, laborers, watchmen, and ail other employees engaged in operating 
grain elevators. 

Fuel and supplies. — The cost of fuel for power, heating, and 
lighting plants ; power for heating, lighting, and operating machinery ; 
and water, ice, oil, waste, and other supplies for operating such 
property. 

Stationery and printing.— The cost of stationery and printing 
used in connection with the operation of grain elevators. 

Other expenses. — The cost of grain used to make up shortage in 
elevators; stationery and printing; rent for and repairs of rented 
offices ; and other operating expenses not otherwise provided for m 
this account 

Note. — When officers have immediate supervision over grain eleva- 
tors and other operations their pay, office, and other expenses, as also 
the pay, office, and other expenses of their assistants, clerks, and office 
attendants, shall be equitably apportioned to the amounts appropriate 
to the operations over which they have supervision. 

444. stockyards. 

This account shall include the cost of openting stockyards other 
than small stockyards or stock pens at stations, which are classed 
as station facilities. It shall include: 

Superintendence.— The pay of officers directly in charge of stock- 
yard operations; the pay of their assistants, clerks, and office attend- 
. ants; also the office, traveling, and other expenses of such officers and 
employees. 

Employees. — The pay of foremen, subforeinen, yardmen, tallymen, 
weighmasters, stock loaders, drovers, drivers, engineers, firemen, . 
shovelers, watchmen, policemen, and other stockyard . employees. 

Fuel and supplies.— T he cost of fuel, gas, electric current, water; 
hay, grain, oats, and other feed for stock; straw and other bedding 
material ; and other stockyard supplies. 

Stationery and printing,— The cost of stationery and printing 
used in connection with the operation of stockyards. 

Other expenses.— Payments for loss or damage to live stock, 
and other expenses not othewise provided for in this account. 



28 o Analysis of Railroad Operations 

Note. — ^When officers have immediate supervision over stockyard 
services and other operations their pay, office, and other expenses, as 
also the pay, office, and other expenses of their assistants, clerks, and 
office attendants, shall be equitably apportioned to the accounts ap- 
propriate to the operations over which they have supervision. 

445. PRODUCING POWER SOLD 

This account shall include the cost of operating power plants, sub- 
stations, transmission systems and distribution systems, for the pro- 
duction of power sold. 

The proportion of the cost assignable to the production of the 
power sold only shall be included in this account. (See special in- 
structions, sections 12, 13, and 14.) 

This account shall include : 

SuPERiNTENDENCE.--The pay of officers directly in charge of power 
plants, substations, transmission systems and distribution systems; pay 
of their clerks and office attendants; also the office, traveling, and 
other expenses of such officers and employees. 

Employees. — The pay of foremen, subforemen, engineers, firemen, 
electricians, system operators or load dispatchers, dynamo tenders, 
foremen regulators, regulators and assistants, switchboard men, brush 
men, oilers, wipers, wiremen, and others engaged in the operation of 
power plant and substation apparatus and devices. 

Fuel. — ^The cost of fuel used in the production of power and for 
heating power plants. 

Other supplies. — The cost of water, lubricants, and other power 
plant and substation supplies. 

Stationery and printing.-— The cost of stationery and printing 
used in connection with producing power sold. 

Other expenses. — The items of expense not otherwise provided 
for in this account. 

Note. — ^When officers have immediate supervision over producing 
power sold and other operations, their pay, office, and other expenses, 
as also the pay office, and other expenses of their assistants, clerks, 
and office attendants, shall be equitably apportioned to the accounts 
appropriate to the operations over which they have supervision. 

446. OTHER MISCELLANEOUS OPERATIONS. 

This account shall include the operations of facilities such as cold- 
storage plants ; coal-storage plants ; cotton-compress plants ; wood- 
preserving plants ; ice-supply plants, etc., when the cost of the facilities 
is includible in the road and equipment accounts and they are operated 
for the benefit of the carrier and others. The proportion assignable to 
the commercial operations only shall be included in this account. 

Note. — When officers have immediate supervision over other mis- 
cellaneous service and other operations, their pay, office, and other ex- 
penses, as also the pay, office and other expenses of their assistants,: 
clerks, and office attendants, shall be equitably apportioned to the 
accounts appropriate to the operations over which they have super- 
vision. 



Appendix B 


281 


VIL GENERAL. 

The primary accounts included in this general account are designed 
to show the expenses incurred of a general character not chargeable 
to the preceding general accoimts, such as those for general admin- 
istration and accounting, and those of the financial, law, real estate, 
tax, and claim departments. 

The accounts for general expenses shall be kept in such manner as 
to show separately, by primary accounts, the expenses directly as- 
signable to water-line operations. 

Noie.— D irectly assignable organization and administration expenses 
incident to investments in leased or nonoperating physical property, 
and in stocks, bonds, and other securities, are chargeable to income 
account No. 549, “Maintenance of investment organization.” 

451. SALARIES AND EXPENSES OF GENERAL OFFICES. 

This account shall include: 

Salaries,— T he pay of all general officers not otherwise provided 
for, including salaries and fees of receivers and commissions paid to 
general officers in lieu of salaries. 


LIST 07 077XCSSS. 


(See special instructions, section 22,) 


Chairman of the hoard. 
President, 

Assistant to president. 
Vice president. 

Assistant to vice president* 
Secretary. 

Assistant secretary. 
Transfer agent 
Treasurer, 

Assistant treasurer. 

Local treasurer. 
Comptroller. 

Assistant comptroller. 
General auditor. 

Auditor. 

Assistant auditor. 

Auditor of revenues. 


Auditor of passenger accounts. 

Assistant auditor of passenger accounts. 
Auditor of freight accounts. 

Assistant auditor of freight accounts. 
Auditor of station accounts. 

Auditor of disbursements. 

Assistant auditor of disbursements. 
Auditor of miscellaneous accounts. 
Assistant auditor of miscellaneous ae* 
counts. 

Auditor of coal and coke accounts. 
Freight claim agent. 

Assistant freight claim agent 
General accountant 
Real^tate agent 
Assistant real-estate agent 
Tax commissioner. 


Expenses,— The traveling and other expenses of officers whose 
pay is included in this account, including supplies for business cars 
used by them, cost of running official trains for them, and cost of 
membership fees and dues in railway and other associations; 

Note A. — ^When officers* duties are restricted to a single department 
their salaries and expenses shall be charged to that department in 
the accounts for superintendence or for law expenses, as may be 
appropriate. When officers have immediate supervision over more 
than one operating department, their salaries and expenses shall be 
apportioned equally among the departments over which they , have 
jurisdiction. ^ V 

Note B.— The pay and expenses of the purchasing agent, assistant 
purdiasing agent, assistant to purchasing agent, general storekeeper, 



282 


Analysis of Railroad Operations 


division storekeeper, their clerks^ and attendants, shall be charged 
through clearing accounts “Material store expenses” and “Stationery 
store expenses,” or material account “Fuel,” as may be appropriate. 


452. SALARIES AND EXPENSES OF CLERKS AND ATTENDANTS. 
This account shall include the pay and expenses of clerks and at- 
tendants of the officers whose salaries are includible in account No. 
451, “Salaries and expenses of general officers.” 

Pay of clerks.— The pay of persons employed in accounting and 
clerical service. 

LIST OF SlifPLOYEES. 


Ca^iers. 

Chief accouQtatits. 
Chief clerks. 
Clerks. 

Inspectors. 


(See special instructions, section 22.) 


Mail clerks. 
Paymasters. 
Postmasters. 
Koute agents. 
Special agents. 


Stenographers. 

Ticket receivers. 
Traveling accountants. 
Traveling auditors. 


Pay of attendants. — The pay of persons employed in attendance 
at general offices and on business cars. 


LIST OF EMPLOYEES. 


(See special instructions, section 22.) 


Bank messengers. 
Chauffeurs. 

Cleaners. 

Cooks. 

Drivers! of service wagons. 
Elevator operators. 
Engineers. 

Firemen. 


Janitora 

Messengers. 

Porters, 

Pump men. 

Stablemen. 

Superintendent of general 
office building. 
Telegraph operators. 


Telephone operators. 
Ushers. 

Waiters. 

Watchmen. 


Expenses. — The traveling and other expenses of employees desig- 
nated above, including the cost of supplies for business cars and 
cost of running official trains for them. 


453. GENERAL OFFICE SUPPLIES AND EXPENSES. 

This account shall include the office expenses of officers designated 
in account No. 451, “Salaries and expenses of general officers.” 


ITEMS OF EXPENSE AND SUPPLIES, 


(Sec special instructions, section 22.) 


Alterations of partitions 
and fixtures in general 
offices. 

Atlases and maps. 

Books for office use. 

Cable tolls. 

Cleaning. 

Express charges. 

Furniture repairs and re- 
newals. 


Heating, 

Horse keep. 

Lighting. 

Local messenger service. 
Periodicals and news- 
papers. 

Kent of genera! offices. 
Kent of tabulating ma- 
chines. 


Kepairs of rented general 
offices. 

Keports of commercial 
standings. 

Service of automobiles. 
Telegraph service. 
Telephone service. 
Watchmen service. 


Note.— The proportion of general office expenses occasioned by 
the law department shall be included in account No. 454, “Law 
expenses.” : 



Appendix B 


283 


454. LAW EXPENSES. 

This account shall include the pay and the office and other expenses, 
when not provided for elsewhere, of officers and employees of the 
law department, the cost of suits, and the payments of special law fees. 


LIST OF OFFICESS AND EMFLOYEES. 


General counsel. 
General solicitor. 
Assistant counsel. 
Solicitor. 

Commerce counsel. 


(See special instructions, section 22.) 

Commerce agent. Law agent. 

Special counsel. Clerks. 

Statutory attorney. Office attendants. 

Attorney. 

Counsel. 


ITEMS OF EZFENSS AND SUFFLXES. 

(See special instructions, section 22.) 


Arbitrators* services in settlement of 
disputed questions. 

Cost of taking depositions. 

Cost of testimony. 

Cost of suits. 

Court bonds. 

Court expensea 

Drawing and recording agreements as to 
trackage rights, etc. 

Express charges. 

Fees and retainers of attorneys (uot 
regular employees). 

Law books. 

Legal forms. 

Legal reports. 

Membership fees and dues in associa- 
tions to protect carriers against litiga- 
tion in respect to patents. 


Member^ip fees and dues in !gy asso- 
ciations. 

Notarial fees not provided for elsewhere 
Office expenses. 

Printing of briefs, testimony, and re- 
ports. 

Proportion of general office expensed 
Kent of offices. 

Special fees. 

Telegraph service. 

Telephone service. 

Traveling expenses. 

Witness fees not provided for elsewhere. 


455. INSURANCE. 

This account shall include premiums, except reinsurance premiums, 
for insuring the carrier against loss, through injuries to persons or 
damage to or destruction or loss of property, whether caused by 
fire, accident, or other cause, when such loss to the carrier would 
chargeable to general account VII, General; also premiums on fidelity 
bonds of officers and employees whose pay is chargeable to general 
account VII, General. (See special instructions, section 18.) 

Note.— The premiums paid by the carrier to its insurance fund shall 
be credited to an insurance account, to which account shall be charged 
the amount of all claims for injuries to persons and damages to the 
property covered by its insurance. To such account shall also be 
charged all reinsurance premiums paid to insurance companies, and 
to it shall be credited all amounts recovered from insurance com- 
panies for damage to the property reinsured by them. 

456. RELIEF DEPARTMENT EXPENSES. 

This account shall include salaries and expenses incurred in con- 
nection with conducting relief departments; also contributions to 
departments., 



284 Analysis of Railroad Operations 

457. PENSIONS. 

This account shall include pensions or gratuities paid out of the 
carrier’s funds to retired employees or their heirs and the expenses 
solely in connection therewith. 

458. STATIONERY AND PRINTING. 

This account shall include the cost of stationery and printing used 
in general offices and not chargeable to other accounts, including the 
cost of printing annual reports, contracts, leases, stock certificates, 
and passes. 


STATIONSRY AMO PRINTING ITEIfS 

(See special instructions, section 22.) 


Adding madunes. 

Indexes. 

Phonographs and records. 

Addressographs and sup* 

Ink for writing and draw- 

Pins. 

plies. 

ing. 

Postage. 

Ann rests. 

Inkstands. 

Punches (not conductors^ 

Binders. 

Invoice books. 

or baggagemen’s^ 

Blank books. 

Legal cap paper. 

Rubber bands. 

Blotters. 

Letter paper. 

Rubber stamps. 

Blotting paper. 

Manifold paper. 

Rulers. 

Bristol board. 

Manifold pens. 

Ruling pens. 

Calculating xnacbinea 

Mimeographs. 

Scrapbooks. 

Calendars. 

Mucilage. 

Sealing wax. 

Carbon paper. 

Mucilage brushes. 

Seals. 

Cardboard. 

Neostyles. 

Shears. 

(3ards, blank and printed. 

Note paper. 

Shipping tags. 

Circulars. 

Notices, 

Shorthand notebooks. 

Computing tables. 

Numbering stamps. 

Sponge cups. 

Copy (impression) books. 

Oil paper. 

Sponges. 

Copying brushes. 

Paper, 

Stamps. 

Copying presses. 

Paper baskets. 

Stamps, impression. 

Crayons. 

Paper clips. 

Stylographs. 

Cyclostyles, 

Paper cutters. 

T^lets blank and printed. 

Dating stamps and ribbons. 

Paper fasteners. 

Tape. 

Dictaphones. 

Paper files. 

Telegraph blanks. 

Dictographs. 

Paper weights. 

Tissue (impression) paper. 

Drawing paper. 

Papyrographsi. 

Tracing cloth. 

Duplicators. 

Parchment paper. 

Tracing paper. 

Electric pens. 

Passes. 

Twine. 

Envelopes. 

Pay checks. 

Typewriters and ribbons. 

Erasers, rubber and steel. 

Pencil sharpeners. 

Wage tables. 

Eyelet punches. 

Pencils for writing and 

Wastebaskets. 

Eyelets. 

drawing. 

Water colors. 

File boxes, paper. 

Penholders, 

Water holders. 

Forms, blank and printed. 

Penracks. 

Wrapping paper. 

Glass pens. 

Pens for writing and draw- 

Wringers for copying 

Hectographs, 

ing. 

presses. 


Note A.-“The cost of printing briefs, legal forms, testimony, reports, 
etc., for the law department is chargeable to account No. 454, ^*Law . 
expenses.” 

Note B.— The cost of printing bonds, etc,, in connection with the 
carrier’s funded debt shall be included in balance-sheet , account No. 
725, "Discount on funded debt” 




285 


Appendix B 

459. VALUATION EXPENSES. 

This account shall include expenses incident to the ascertainment 
(in accordance with the Act to Regulate Commerce as amended 
March 1, 1913, or with other Federal or State requirements) of the 
value of property owned or used by the carrier, such expenses in- 
cluding pay, and office, traveling, and other expenses of officers 
specially employed or assigned to such work, and of their assistants, 
clerks, and attendants, and the cost of stationery and printing, and of 
engineering supplies consumed. 

Note. — No charge shall be made to this account for the salaries of 
officers or of their clerks and attendants for incidental services in 
connection with valuation work; but special office, clerical, traveling, 
and incidental expenses incurred by these officers on account of such 
work shall be included as a part of the cost of the work. 

460. OTHER EXPENSES. 

This account shall include incidental general expenses which are 
not properly chargeable to any of the foregoing accounts. 

XTSUS OF EXPEMSS. 

(See special instructions, section 22.) 

Cost of draping buildings. 

Cost of publishing annual reports in newspapers, and other corporate and 
financial notices of general character. 

Cost of publishing notices of stockholders* meetings and of election of directors. 
Donations on account of catastrophes, epidemics, etc. 

Donations to local fire departments. 

Donations to Y. M. C. A., and similar institutions. 

Exchange on checks cashed or deposited. 

Exchange on drafts bought 

Fees and expenses paid to directors and trustees. 

loss through payment of wages to a wrong person. 

Penalties assessed for nonpayment of claims for overcharge 

. 46t GENERAL JOINT FACILITIES--DR. 

This account shall include the carrier’s proportions of general ex- 
penses incurred by others incident to maintaining and operating tracks, 
yards, terminals, and other facilities used jointly. 

Note. — ^The purpose of tliis accoimt is to show the amount accruing 
against the carrier fbr its proportion of the expense of gaieral ad- 
, ministration of tracks, yards, terminals, and other facilities admin- 
istered by others, and in the joint use of which the carrier par- 
ticipates. (See special instructions, section 9.) 

462. GENERAL JOINT FACILITIES-^CR. 

This account shall include amounts chargeable to others as their 
proportions of general expenses incurred by the carrier incident to 
maintaining and operating tracks, yards, terminals, and other facilities 
used jointly. 



286 Analysis of Railroad Operations 

Note. — The purpose of this account is to show the amounts accruing 
in favor of the carrier and against others for their proportions of the 
expense of general administration of tracks, yards, terminals, and 
other facilities administered by the carrier, and in the joint use of 
which others participate. (See special instructions, section 9.) 

VIIL TRANSPORTATION FOR INVESTMENT— CR. 

This account shall include fair allowances representing the expense 
to the carrier of transporting, on transportation trains, men engaged 
in and material for construction. 

Amounts credited to this account shall be concurrently charged to 
the appropriate property investment accounts. 


SUPPLEMENTS 

ORDER OF JUNE 2, 1924— RECAPTURE 


In the Matter of the Recovery and Payment of Excess Net Railway 
Operating Income Under the Provisions of Section 15a of the Inter- 
state Commerce Act, 


At a Session of the INTERSTATE COMMERCE COMMISSION 

Division 4, held at its office in Washington, D. C., on the 2d day of 

June, A. D, 1924. 

The commission having under consideration the requirements of its 
orders dated January 16, 1922, March 16, 1922, March 21, 1923, and 
March 17, 1924, in the above-entitled matter, and in order to procure the . . 
proper accounting results from the provisions of section 2 of general 
instructions in the Classification of Operating Revenues and Operating 
Expenses; to provide rules for similar accounting for items affecting in- 
come accounts; and to prescribe accounting procedure that will assist the 
commission in administering the recapture provisions of the act; said 
section 2 of the accounting instructions reading as follows : 

2. Unaudited Items Affecting Operating Accounts. — ^When for any 
cause the amount of any item affecting operating revenues or operating 
expenses can not be accurately determined in time for inclusion in the. 
accounts of the month in which the transaction occurs, the amount of the ^ 
item shall be estimated and in such form charged or credited to operating 
accounts and credited to balance-sheet account No. 778, “Other unadjusted 
credits,” or charged to balance-sheet account No. 727, “Other unadjusted 
debits,” as may be appropriate, the necessary adjustments being made later 
when the item is audited. The carrier is not required to anticipate minor 
items which would not appreciably affect the operating accounts. 

It is ordered: 

1. In determining the amount of recapturafele income the commission : . 
will exercise the power to determine the reasonableness o£ ^tiinates in- , 



Appendix B 287 

eluded in the accounts to represent unaudited items and will initiate charges 
or credits in the returns for this purpose where necessary to correct a 
deficiency on the part of the carrier. 

2. Estimates included in the accounts by the carrier to represent un- 
audited items shall be "on a basis determined to be equitable from the 
carrier’s experience and best sources of information. Maintenance work 
not performed shall not be considered an unaudited item. The records 
shall indicate in detail the facts upon which such estimates are based, 
and the details shall be preserved in the files permanently unless their 
destruction shall be authorized subsequently by the commission. 

3. Accounting on the foregoing basis is prescribed for items affecting 
income accounts embraced in the Classification of Income, Profit and 
Loss, and General Balance Sheet Accounts for Steam Roads, effective 
July 1, 1914, in order to give definite effect, for the accounting purposes 
here under consideration, to section 1 of special instructions on page 13 
of that classification reading as follows : 

1. Income Accounts Defined.— Income accounts are those designed to 
show, as nearly as practicable, for each fiscal period, the total amount of 
money that a carrier becomes entitled to receive for services rendered, the 
returns accrued upon investments, the accrued costs paid or payable for 
the services rendered by it, the losses sustained by it, the amounts accrued 
for taxes, for use of moneys and for use of properties of others, and the 
appropriations made for income during the period. The net balance of 
Income*' (or loss) shall be carried to Profit and Loss. 

4. Balances in accounts 727, "Other unadjusted debits,” and 778, "Other 
unadjusted credits,” representing unaudited items shall be analyzed and ; 
explained according to the . primary accounts used in creating the susp^se, 
items. Balances for each year shall be kept separate. 

5. Where errors are discovered affecting net railway operating income, 
whether or not corrected by the carrier in a year subsequent to that in 
which the erfof was made, the commission reserves the right to correct ^ 
return for the purposes of section ISa, for the year or years affected , 
thereby, and to require such adjustments in current accounts as may be 
necessary. 

/# sy further ordered. That for the accomplishment of the purposes set 
forth herein the effective date of this order will be March 1, 1920. 

By the commission, division 4: 

(sealJ George B. McGintv, 

Secretory^ 



288 


Analysis of Railroad Operations 


ORDER OF JUNE 4, 1924 
EQUALIZATION OF EXPENSES 


At a Session of the INTERSTATE COMMERCE COMMISSK 
Division 4, held at its office in Washington, D. C, on the 2d day 
June, A. D. 1924. 

The matter of a uniform system of accounts to be kept by st( 
roads being under consideration: 

li is ordered. That section 19 of the special instructions in the Clas 
cation of Operating Revenues and Operating Expenses of Steam Roi 
Issue of 1914, as prescribed by the order of the commission of April 
1921, be and is hereby canceled and the following is prescribed as sec 
19 of the special instructions : 

19. Equalization of Expenses.— (a) When carriers adopt a budget 
estimate of expenditures for maintenance of fixed improvements or eq 
ment for the year, such authorized estimates may be equalized by divi 
into 12 equal parts, if for a full year, or into a number of equal p 
corresponding to the number of months remaining in the year a 
the adoption of the maintenance program. If advantage is taken of 
optional accounting prescribed in this section, the appropriate primary 
counts chargeable with the accrued liabilities and the equalization aco 
combined shall contain, each month, amounts aggregating one of sudi e 
parts. 

(6) Adequate records shall be kept to fully support the estimates 
expenditures for maintenance which form the basis of entries to acco 
280, “Equalization — Way and structures,” and 338, “Equalization — Ec 
ment,” and these records shall be filed in such manner as to be re? 
accessible for examination by representatives of the Interstate Comm 
Commission. The equalization accounts are provided in order that i 
use may show, for each month, the adjustment necessary between acc 
liabilities included in the other primary accounts and the equal moi 
proportion of the authorized estimate of maintenance expenses for 
period. 

(c) If the accrued liabilities chargeable to the primary accounts dc 
aggregate a sura equivalent to the equal monthly proportion of the estitr 

* cost of maintaining such way and structures and equipment as are pro^ 
for in the budget, an amount sufficient to make up the difference sha 
charged to the appropriate equalization account. If amounts charg 
to the primary accounts are more than the equal monthly proportion o 
budget, the difference shall be credited to the equalization account. 

(d) Estimates of expenses, other than under general accounts I 
11, on account of personal injury or loss and damage liability, for statk 
and printing, and for advertising, may be equalized in the monthly acc< 
for die year by use of the regular primary accounts. 



Appendix B 289 

(e) Amounts charged or credited to operating expenses under general 
accounts 1 and II for equalization purposes shall be credited or charged to 
reserve accounts styled ‘‘Equalization reserve—Way and structures,” or 
“Equalization reserve— Equipment” Balances in such accounts and in 
equalization reserve accounts created under the provisions of paragraph 
(d) herein shall be carried, during the year, prior to clearance at the 
close of the fiscal period, in account 774, “Operating reserves.” 

(/) All equalization reserve iaLCCOunts shall be cleared at the close of 
the year through the accounts used in creating the reserves. 

(g) Estimates to cover unaudited items of accrued revenue, expense, 
and income shall be accounted for through accounts 727, “Other unad- 
justed debits,” and 778, “Other unadjusted credits,” as directed in section 
2 of general instructions in the Classification of Operating Revenues and 
Operating Expenses and in the order of the commission of June 2, 1924, 
interpreting those instructions. 

It is further ordered. That accounts 280, “Equalization — Way and struc- 
tures,” and 338, “Equalization— Equipment,” with the texts pertaining 
thereto, as follows, be prescribed as a part of the Classification of Operat- 
ing Revenues and Operating Expenses of Steam Roads, Issue of 1914: 

Account 280 , “Equalization— Wav and Structures.” 

This account, the use of which is optional, shall include an adjustment of 
the monthly proportion of the estimated or authorized maintenance expenses 
for the year, as provided for in section 19 of the special instructions, the 
amount included herein being the difierence between actual expenditures as 
reflected in other primary accounts under this general account, and the equal 
monthly proportion of the estimate for the period. Concurrently, a credit, 
or debit, as may be appropriate, shall be made to a ledger account styled, 
“Equalization reserve—Way and structures.” 

Account 338, “Equauzation— Equipment.” 

This account, the use of which is optional, shall include an adjustment 
of the monthly proportion of the estimated or authorized maintenance ex- 
penses for the year, as provided for in section 19 of the special instructions, 
the amount included herein being the difference between actual expenditures 
as reflected in other primary accounts under this general account, and the 
equal monthly proportion of the estimate for the period. Concurrently, a 
credit, or debit, as may be appropriate, shall be made to a ledger account 
styled, “Equalization reserve— Equipment,” 

It is further ordered. That section 20 of special instructions on page 
38 of the Classification of Operating Revenues and Operating Expenses of 
Steam Roads, Issue of 1914, be and is hereby canceled. 

It is further ordered, That this order shall become effective on January 
1,1924, 

By the commission, division 4. 

[seal.] George B. McGxnty, 

Secretary. 



APPENDIX C 


CLASSIFICATION 

OF 

INCOME, PROFIT AND LOSS. AND GENERAL 
BALANCE SHEET ACCOUNTS 

OP 

STEAM ROADS 

PBESCRIBED BY THE 

INTERSTATE COMMERCE COMMISSION 

IN ACCORDANCE WITH SECTION 20 OF THE 
ACT TO BEGXJDATE COMMERCE 


ISSUE OF 1914 


Effective on July i, 1914 
With Supplements 




Appendix C 291 

CONTENTS. 


Page 

Order of the Commission ' 2^ 

Introductory letter 2^ 

General instructions 2 % 

Special instructions for income accounts 298 

Text pertaining to income accounts 299 

Form of income statement 314 

Special instructions for profit and loss accounts 316 

Text pertaining to profit and loss accounts 317 

Special instructions for balance-sheet accounts 322 

Text pertaining to general balance-sheet accounts 326 

Form of general balance-sheet statement • 34S 

Supplements; . 

Order of December 20, 1920 348 • ■ 

Order of March 14, 1921 349^ ;;;; 

Order of August 19, 1921 .............i... 336; v ' 



292 


Analysis of Railroad Operations 

ORDER OF THE COMMISSION 

At a General Session of the INTERSTATE COMMERCE COMMIS- 
SION, held at its office in Washington, D. C., on the 19th day of May, 

A. D. 19R 

The subject of a Uniform System of Accounts to be prescribed for and 
kept by carriers being under consideration, the following order was 
entered : 

It is ordered. That the Classification of Income, Profit and Loss, and 
General Balance Sheet Accounts, with the text pertaining thereto, embodied 
in printed form to be hereafter known as Issue of 1914, a copy of which 
is now before this Commission, be, and the same is hereby, approved; that 
a copy thereof duly authenticated by the Secretary of the Commission be 
filed in its archives, and a second copy thereof, in like manner authenticated, 
in the office of the Division of Carriers* Accounts; and that each of 
said copies so authenticated and filed shall be deemed an original record 
thereof. 

It is further ordered, That the said classification, with the text per- 
taining thereto be, and is hereby, prescribed for the use of carriers by rail 
(exclusive of electric railways) subject to the provisions of the Act to 
Regulate Commerce as amended, in the keeping and recording of their said 
accounts ; that each and every such carrier and each and every receiver 
or operating trustee of any such carrier be required to keep all said 
accounts in conformity therewith; and that a copy of the said issue be 
sent to each and every such carrier and to each and every receiver or 
operating trustee of any such carrier. 

It is further ordered, That in order to avoid destroying the basis of 
comparison with previous years, any such carrier or any receiver or operat- 
ing trustee of any such carrier may, during the twelve months from the 
time that the said issue becomes elective, keep and maintain, in addition 
to the said accounts hereby prescribed, such portion or portions of its 
present income, profit and loss, and general balance-sheet accounts as may 
be deemed desirable by any such carrier or by any receiver or operating 
trustee thereof, for the purpose of such comparison ; or, during the same 
period, may maintain such groupings of the primary accounts hereby pre- 
scribed as may be desired for that purpose. 

It is further ordered. That, unless otherwise ordered, any such carrier, 
or any receiver or operating trustee of any such carrier may keep any 
temporary or. experimental income, profit and loss, and general balance-sheet, 
accounts the purpose of which shall be to develop the efficiency of opera- 
tions: however, Tha;t .such temporaiy or experimental accounts 

shall not impair the integrity of any general or primary accpunt hereby; 
prescribed. 



Appendix C 29J ’ 

It is further ordered. That July 1, 1914, be, and is hereby, fixed as the 
date on which the said issue of the Classification of Income, Profit and 
Loss, and General Balance Sheet Accounts for Steam Roads shall become 
effective. 

By the Commission. 

[seal.] George B. McGinty, 

Secretary. 



294 


Analysis of Railroad Operations 

INTRODUCTORY LETTER. 


Interstate Commerce Commission, 
Division of Carriers* Accounts, 
Washington, May ig, igi4. 

To Accounting Officers of Steam Railways : 

This Classification of Income, Profit and Loss, and General Balance 
Sheet Accounts supersedes the Form of Income and Profit and Loss State- 
ment for Steam Roads, First Issue, effective July 1, 1912, and the Form of 
General Balance Sheet Statement, First Revised Issue, effective June IS, 
1910. It also supersedes conflicting instructions in Accounting Bulletin 
No. 8. 

In Income all of the revenues from operating physical property the cost 
of which is includible in the accounts for investment in road and equip- 
ment have been combined in one account, and correspondingly the expenses 
of operation have been combined. Separate accounts have been provided 
for the revenues from and the expenses of operating miscellaneous physical 
property. A distinct account has been provided in which to include such 
revenue from operations as has been determined to be uncollectible, during 
the ‘period for which the accounts are stated. Distinct accounts have been 
provided for rent from and rent for the several classes of equipment. 

In Profit and Loss an account has been provided in which to show the 
amount of revenue overcharges which are determined to be unrefundable 
during the period for which the accounts are stated. An account is also 
provided for donations from individuals and companies for the construction 
or acquisition of property or for compensating the carrier for loss antici- 
pated during the early period of operation. 

Balance sheet asset accounts have been provided for "Improvements on 
leased railway property,” and “Deposits in lieu of mortgaged property 
sold.” Additional accounts have been provided in which to include demand 
deposits and time drafts and deposits, items which heretofore have been 
included as cash. The account “Taxes paid in advance” has been eliminated 
and provision made for showing in red the net amount of taxes paid over 
the amount of taxes accrued in an account under the caption of “Tax 
liability.** A liability account has been provided for “Grants in aid of 
construction,” and separate accounts have been provided for accrued de- 
preciation upon road, upon equipment, and upon miscellaneous physical 
property. 

In the preparation of the text of the accounts and in the grouping of 
the accounts in the form of general balance sheet it has been primarily the 
pu^se to provide for showing, in the group of accounts under the cap- 
tion "Current assets,” only items of available assets or of assets which 
there is a reasonable assurance will become available within a year from 
the date of the balance sheet ^ ^ 




Appendix C 295 

The general and special instructions contain a comprehensive statement 
of the principles underlying the classification, indicating generally the ap** 
plication of the accounting rules. The attention of accounting officers is 
called to the importance of requiring all employees who are assigned to 
accounting work in connection with income, profit and loss, and general 
balance sheet accounts to familiarize themselves thoroughly with these 
instructions. 

In the preparation of the revision of the accounting rules contained in 
this and other classifications for steam roads, which are concurrently issued, 
the Commission has had the cooperation of the Association of American 
Railway Accounting Officers, and its Standing Committee on Corporate, 
Fiscal, and General Accounts. 

The classification, in tentative form, has been presented for criticism 
and suggestions to the chief accounting officer of each railway and to the 
railway commissions of the several States. All suggestions received from 
such parties have been given careful consideration, and many of t&em / 
have been incorporated in die classification as here issued; . [ 

FafeD W. SWEKEV, 

Chief Bsammer of Account 




296 


Analysis of Railroad Operations 

GENERAL INSTRUCTIONS. 


The carrier's records shall be kept with sufficient particularity to show 
fully the facts pertaining to all entries made in the accounts provided 
herein for Income, Profit and Loss, and General Balance Sheet. Where 
the full information is not recorded in the general books, the entries therein 
shall be supported by other records in which the full details shall be shown. 
Such general book entries shall contain sufficient reference to the detail 
records to permit ready identification, and the detail records shall be filed 
in such manner as to be readily accessible for examination by representa- 
tives of the Interstate Commerce Commission. 


1. When the title and definition of an income, profit and loss, or general 
balance-sheet account clearly indicate that it is a summary of other ac- 
counts, it is not required that a special ledger account shall be kept under 
such a title to include the balances from the accounts usually kept in the 
ledger, but in such case the titles of the subaccounts in the ledger shall 
give references by numbers, titles, or both, to the income, profit and loss, 
or general balance-sheet account prescribed herein of which they are sub- 
divisions. 

2. When the compensation for the use of equipment held under lease 
includes both rent and maintenance (repairs and depreciation), the lessor 
shall determine the proportion of gross rent applicable respectively to rent, 
repairs, and depreciation. The lessor shall credit the portion covering rent 
to the appropriate rent account in Income, the portion covering repairs to 
the account originally charged or chargeable with the cost of the repairs, 
and the portion covering depreciation to the accrued depreciation account 
for equipment. The lessee shall correspondingly charge the portion cover- 
ing rent to the appropriate rent account in Income, the portion covering 
repairs to the appropriate equipment repair account, and the portion cover- 
ing depreciation to the appropriate equipmient depreciation account in 
Operating Expenses. 

When the compensation for the use of equipment held under lease covers 
only rent and depreciation (the lessee being responsible for the current 
repairs) the lessor shall determine the proportion of the gross rent ap- 
plicable to rent and that applicable to depreciation. The lessor shall credit 
the portion covering rent to the appropriate rent account in Income, and 
the portion covering depreciation to the accrued depreciation account for 
equipment. The lessee shall charge the portion covering rent to the ap- 
propriate rent account in Income, and the portion covering depreciation to 
the appropriate depreciation account in Operating Expenses. 

When the lease provides that the lessee shml be responsible for the 
maintenance of the leased equipment, the lessee shall charge the estimated 
current depreciation to the appropriate depreciation account in Opemting 
Expenses, and concurrently credit the amounts thus charjged to balance- 
sheet account No. 778, “Omer unadjusted credits.” To this latter account 
shall be charged, to the extent of the credits therein with respect to the 
equipment, the cost of restoring the depreciation upon the equipment, or: 
the parents made to the lessor for the purpose of compensating for th^ 
loss through depreciation at the time the equipment is surrendered^ ' 



Appendix C 297 

When the accounting In connection with equipment held under lease 
requires, under this rule, an apportionment of the compensation as between 
rent and maintenance, the lessor shall show the distribution of the charges 
upon its bills, and such distribution shall be adhered to by the lessee. 



29S 


Analysis of Railroad Operations 


SPECIAL INSTRUCTIONS FOR 
INCOME ACCOUNTS. 


1. Income Accounts Defined.— Income accoimts are those designed to 
show, as nearly as practicable, for each fiscal period, the total amount of 
money that a carrier becomes entitled to receive for services rendered, the 
returns accrued upon investments, the accrued costs paid or payable for 
the services rendered by it, the losses sustained by it, the amounts accrued 
for taxes, for use of moneys and for use of properties of others, and the 
appropriations made from income during the period. The net balance of 
income (or loss) shall be carried to Profit and Loss. 

2. Delayed Items.— When no provisions have been made through entries 
in the accounts of this classification for anticipating delayed items charge- 
able or creditable to Income, and the amount of any such item is relatively, 
so large that its inclusion in the accounts for a single year would seriously ' 
distort those accounts, the carrier, if so authorized upon application to the 
Interstate Commerce Commission, shall distribute to Profit and Loss so 
much of the amount as may be authorized. The carrier, in its application 
to the Commission, shall file the full particulars concerning each, item and 
the reasons which in its judgment indicate the propriety of such accounting. 

Delayed items are items representing transactions which occurred befpre * 
the current year, 

3. Uncollectible Revenue, — ^An account is provided for revenue charges 
against individuals and companies which during the period for which the 
Income Account is stated have been determined to be uncollectible. This 
account is provided for the purpose of eliminating from the ledger assets 
of the carrier, or of writing down to nominal amounts in its asset accounts, ' 
items of revenue charges which cannot be collected, such as freight charges 
for which credit has been allowed, or undercharges discovered after the 
freight has been delivered. 



Appendix C 299 

TEXT PERTAINING tO THE INCOME ACCOUNTS. 


I. CREDITS. 

501. RAILWAY OPERATING REVENUES. 

This account shall include the total revenues derived frotn opera- 
tions as shown in the accounts provided in the classification of operat- 
ing revenues. 

502. REVENUES FROM MISCELLANEOUS OPERATIONS. 

This account shall include the total revenues derived from the 
operation of miscellaneous operating physical property, such as that 
the cost of which is includible in balance-sheet account No. 70S» 
“Miscellaneous physical property.** 

Note,— The income from miscellaneous nonoperating physical prop* : 
erty shall be included in account No. 511, “Miscellaneous nonoperating 
physical property.** 

503. HIRE OF FREIGHT CARS-CREDIT BALANCE. 

This account shall include the net credit balance of (1) amounts 
receivable accrued for the use of the accounting company’s freight 
cars leased or interchanged, and {2> amounts payable accrued for 
the use of the freight cars of other carriers, leased or interchanged, 
and for the use of freight cars of individuals and companies not 
carriers. 

Note A. — If the net balance is a debit, it shall be included in ac- 
count No. 536, “Hire of freight cars— Debit balance.’* 

Note B,— Rent for freight cars included in the I^se of road to \ 
another company shall be mcluded in account No. St)9, **Inconic from 
lease of road.** 

Note C— Rents paid for freight cars used in construction work-train 
service are chargeable to the cost of the work. (See general instruc- 
, tiotts for the classification of investment in road and equipment, , 
section 4 c.) 

Note D.— A fair rent for freight cars used in construction work- 
train service shall be credited to the account “Hire of freight cars.” 
(See general instructions for the classification of investment in road 
and equipment, section 4 c.) 

504. RENT FROM LOCOMOTIVES. S 

, This account shall include amounts receivable accrued as rent for ■ 
V tW wse of the accounting company’s locomotives leased or mterchanged. 

Note A.--Rent for locomotives included in lease of road to another 
company shall be included in account No. 509, “Income from leaae - 
of. road.”- ' '-V '-i ' 

Note B.— A fair rent for locomotives used in construction work- : 
train service shall be credited to this account (See g^enerat instruct 
: tiohs for the dassificatioh of investm^t in road and eqtdpfneht, 
:,';sectioa4c;)’-.;'';:' ■ ' -^v. - ;v:'- ''v'. 




300 Analysis of Railroad Operations 

505. RENT FROM PASSENGER-TRAIN CARS. 

This account shall include amounts receivable accrued as rent for 
the use of the accounting company's passenger-train cars leased or 
interchanged. 

Noie.— Rent for passenger-train cars included in lease of road to 
another company shall be included in account No. S09, 'Income from 
lease of road.” 

506. RENT FROM FLOATING EQUIPMENT. 

This account shall include amounts receivable accrued as rent for the 
use of the accounting company's floating equipment leased or chartered. 

Note. — ^Rent from floating equipment included in lease of road to 
another company shall be included in account No. 509, 'Income from 
lease of road.” 

507. RENT FROM WORK EQUIPMENT. 

This account shall include amounts receivable accrued as rent for 
the use of the accounting company’s work equipment leased or inter- 
changed. 

Note A. — ^Rent for work equipment included in lease of road to 
another company shall be included in account No. 509, "Income from 
lease of road.” 

Note B,— A fair rent for work equipment used in construction work- 
train service shall be credited to this account (See general instruc- 
tions for the classification of investment in road and equipment, 
section 4 ^.) 

508. JOINT FACIUTY RENT INCOME. 

This account shall include amounts receivable accrued for rent of 
tracks, yards, terminals, and other facilities owned or controlled by 
the accounting company and used jointly with other companies or 
individuals. 

Amounts receivable from other companies in reimbursement for 
taxes on property jointly used shall be credited to this account. 

Note. — ^The portion of the cost of maintenance, operation, or ad- 
ministration of joint facilities recoverable from others shall be credited 
to the various joint facility accounts provided for operating expenses. 
When the compensation for the use of joint facilities is a fixed 
amount or is based upon a charge per passenger, ton, car, or other 
unit, it shall be fairly apportioned by the creditor between this account 
and the appropriate joint facility operating expense accounts. 

509. INCOME FROM LEASE OF ROAD. 

This account shall include the entire amount receivable accrued for 
the exclusive use of road, tracks, or bridges (including equipment or 
other railway property covered by flie contract) owned or controlled 
by the accounting company, whether payable to the accounting com- 
pany in cash or disbursed by the lessee oh behalf of the accounting., 
company as interest on funded debt, guaranteed dividends on; stock*. ' 
or otherwise. 



Appendix C 301 

When the lessor company maintains the road and equipment leased, 
the cost of maintaining the property rented shall be charged to this 
account, except that when the rent thus receivable for the use of 
property other than equipment is relatively small and the expense 
of maintenance is not separable, the entire amount received may be 
credited to revenue account No. 142, *‘Rents of buildings and other 
property." 

If, under the terms of a lease, the deficit, or any portion of it, result- 
ing from the lessee compaay*s operations of the property leased is 
payable by the lessor company, the amount thus payable shall be 
charged to this account by the lessor. 

Note A. — ^When taxes on leased property are assumed by the lessor, 
the accruals of such taxes shall be included in the lessor’s account 
No. 532, ‘‘Railway tax accruals.” 

Note B.— If property, the rent of which is chargeable to accoiant 
No. 542, “Rent for leased roads,” is sublet by the accounting company, . 
the rent receivable therefor shall be credited to diis account 

510, MISCELLANEOUS RENT INCOME. 

This account shall indude such rents of property owned and con- 
trolled by the accounting carrier as are not provided lor in the fore<» 
going accounts. 

To this account shall be charged the cost of maintenance of the 
property rented, also specific incidental expenses in connection with 
such property, such as the cost of negotiating contracts, advertising 
for tenants, fees paid conveyancers, collectors’ commissions, and 
analogous items. 

Note A.— If property, the rent of which is chargeable to account 
No. 543, “Miscellaneous rents," is sublet by the accounting company, 
the rent receivable therefor shall be credited to this account. 

Note B.— Taxes on property, the rent of which is creditable to 
this account, shall be charged to account No* 532, . “Railway tax 
accruals,” 

Note C— The rent from property carried in balance-sheet account 
No. 705, “'Miscellaneous physical property/’ shall not be included in 
this account, but in account No, 511, “Miscellaneous nonoperating 
physical property.” 

Note D.-— Rent and other income from real estate acquired for new 
, lines or for additions and betterments shall be credited to the appro- 
priate road and equipment accounts until the completion or coming 
mto service of the property. 

SIL MISCELLANEOUS NONOPERATING PHYSICAL PROPERTY, ^ 

This account shall include the net credit balance of the nonoperating 
revenues or income from, and the expenses (including depreciation, . 
but excluding taxes) of, physical property the cost of which is cairried 
b balance-sheet account No, 705, “Miscellaneous physical property" 

Note A.-*Net debit balances in this account shaU be k 

' rediiik. , 



302 


Analysis of Railroad Operations 

Note B.— The revenues from Ae c^eration of miscellaneous operat- 
ing physical property shall be included in income account No. S02, 
“Revenues from miscellaneous operations/* and the expenses of op- 
eration shall be included in account No. 534, “Expenses of miscel- 
laneous operations.** 

512. SEPARATELY OPERATED PROPERTIES— PROFIT, 

This account shall include amounts receivable under the terms of 
agreements or contracts whereby the surplus resulting from the opera- 
tion by others of properties of other companies having a separate 
corporate existence is to be paid, in whole or in part, to the accounting 
company. 

In determining the amount receivable by the accounting company, 
consideration shall be given not only to the operating revenues and 
operating expenses but also to other items of income or deduction 
which affect that amount. 

Note A. — The amount payable by the operating company shall be .. 
charged by it to account No. 550, “Income transferred to other com- \ 
panics.’* 

Note B. — Dividends or other returns upon securities issued by ' 
separately operated companies, and held or controlled by the account- 
ing company, shall be included in account No. 513, “Dividend income*^; 

No. 514, “Income from funded securities**; No. 515, “Income from 
unfunded securities and accounts**; or No. 516, “Income from sinking, 
and other reserve funds,** as may be appropriate. 

513. DIVIDEND INCOME. 

This account shall include dividends declared on railway and other 
stocks, the income from which is the property of the accounting. , 
company, whether such stocks are owned by the accounting company 
and held in its treasury or deposited in trust, or are controlled through ' ■ , 
lease or otherwise. ; , 

Dividends declared shall not be credited prior to actual collection 
unless their payment is reasonably assured by past experience, guaranty, 
anticipated provision, or otherwise. , 

Accruals of guaranteed dividends may be included in this account = 
if their payment is reasonably assured. 

Note A.— This account shall hot include credits for dividends on > ; 
stocks issued or assumed by the accounting company and owned, hy - 
it, whether pledged as collateral or held in its treasury, in special , . : 
deposits, or in sinking or other reserve funds. ’ 

Note B. — Dividends on stocks of other companies held in sinking . 
or other reserve funds shall be credited to account No. 516, “Income : 
from sinking and other reserve funds.” 

514. INCOME FROM FUNDED SECURITIES. > 

This account shall include intoest bn bonds and .other funded J 
securities and on debenture stock of other companies, the mcbthe.;:^ 
from which is the property of the accounting company, whether sttdi 
securities are owned by the accosting company and 




Appendix C 303 

treasury or deposited in t|;ust, or are controlled through lease or 
otherwise. Interest accrued shall not be credited prior to actual col- 
lection unless its payment is reasonably assured by past experience, 
guaranty, anticipated provision, or otherwise. 

At the option of the accounting company there may be included 
each year in this account the portion, applicable to the fiscal period, 
of the amount requisite to extinguish, during the interval between the 
date of acquisition and the date of maturity, the discount or premium 
on funded securities of other companies owned. Amounts thus 
credited or charged shall be concurrently charged or credited to the 
account in which the cost of the securities is carried. 

Note A. — The term funded securities as here used means all un- 
matured bonds, notes, and other evidences of indebtedness (except 
open accounts for advances) none of which by the terras of tiie 
creation of the debt matures until more than one year after the date 
of such creation, provided that in case of an obli^tidn, triaturitig 
serially, such as car-trust notes, the entire amount shall be incloded 
in funded securities if any portion of the obligation matures later than 
one year after date of issue. 

Note B. — This account shall not include interest on funded securities 
issued or assumed by the accounting company and owned by it, whether 
pledged as collateral or held in its treasury, in special deposits, or in 
sinking or other reserve funds. 

Note C—Interest on funded securities of other companies held in, 
sinking or other reserve funds shall be included in account No* 516, 
“Income from sinking and other reserve funds.** 

Note D, — Interest accruing after maturity on any securities not in 
sinking or other reserve funds shall be included in account No, 515, 
“Income from unfunded securities and accounts.” 

SIS. INCOME FROM UNFUNDED SEOJEITIES AND ACQOVmS, 

This account shall include interest on unfunded securities, not^; 
and other evidences of indebtedness payable on demand dr having 
. dates of maturity one year or less from the date of issue, '{^tere^ 
on matured funded securities of other companies, interest 0 ^ hatik 
balances and on open accounts, and other analogous items, indudihg 
discount on short-term notes. The discount on short-term notes shall 
be distributed, through equal monthly credits, over the term of the 

Note A*— Interest on assets held in sinkhg and other reserve funds 
shall be included in account No* 516, “Income from sinking and other 
reserve funds.” 

B.— Discount on bills for ■material purchased shall be credited O 
to the accounts to which is charged the cost of , the material with re^ ; 
spect to whidh the discount is allowed. 

S16: INCOME. FROM SINKING AND OTHER RESERVE ; 

This account shall include the income accrued bn lash, 

including securities issued or assubked'^ the 
accxiuhting cotej^y); :hel<i ha sinking and other reseryb ■; 




304 Analysis of Railroad Operations 

At the option of the accounting ^company there may be included 
each year in this account the portion, applicable to the fiscal period, 
of the amount requisite to extinguish, during the interval between 
the date of acquisition and the date of maturity, the discount or 
premium on funded securities held in sinking or other reserve funds. 
Amounts thus credited or charged shall be concurrently charged or 
credited to the account in which the cost of the securities is carried. 

Note. — Credits to fund reserve accounts representing income on 
reserve funds shall be concurrently charged to account No. 552, . 
“Income applied to sinking and other reserve funds.” 

517. RELEASE OF PREMIUMS ON FUNDED DEBT. 

This account shall include, during each fiscal period, such pro- 
portion of the premiums on outstanding funded debt as may be 
applicable to the period. This proportion shall be determined in 
accordance with special instructions for balance-sheet accounts, sec- 
tion 3. 

518. CONTRIBUTIONS FROM OTHER COMPANIES. 

This account shall include amounts received or receivable from 
other companies or individuals, representing the whole or a part of 
the net deficit of the accounting company when, under the terms of 
agreements or contracts, no obligation for subsequent reimbursement 
is incurred. 

In determining the amount receivable by the accounting company, , 
consideration shall be given not only to the operating revenues and 
operating expenses, but also to other items of income or deduction 
which afiFect that amount. 

Note. — ^The amount payable shall be charged by the contributing 
company to account No. 545, “Separately operated properties— Loss.” : 

519. MISCELLANEOUS INCOME. 

This account shall include all items, not provided for elsewhere, 
properly creditable to Income Account during the fiscal period. 

IL DEBITS. 

531. RAILWAY OPERATING EXPENSES. 

This account shall include the total expenses caused by operations, : ^ ; 
as shown in the accounts provided in the classification of operating ; v 
expenses. 

532. RAILWAY TAX ACCRUALS. 

This account shall include accruals for taxes of all kinds (includ- 
ing Federal income tax) relating to railway property (including float- 
ing equipment, if any), operations, and privileges, whe^er based o$on . 
the valuation of the property, amount of stocks and bondsi issued or C, 
outstanding, gross or net earnings, dividends dechred, nuttier of pa$- , 



Appendix C 5p| 

sengers carried, quantity of freight transported, length of line operated^"" 
or owned, rolling stock opemted or owned, or other basis. 

The taxes on leased property shall be included in this account by the 
carrier obligated to assume such expenses under the terms of the 
lease. 

Note A.— -Taxes on leased property paid by one party to the lease 
and chargeable to the other party to the lease shall be charged directly 
to the party bearing the expense and not included in the Income 
Account of the party first making payment. 

Note B.— Taxes on other than railway property, operations, and 
privileges, shall be charged to account No. 544, “Miscellaneous tax 
accruals,” when the amount is separable from the taxes chargeable 
to this account. 

Note C. — Special assessments for street and other improvements, 
and special benefit taxes, such as water taxes and the like, shall be 
included in operating expense accounts or investment accounts, as may 
be appropriate. 

Note D.— Amounts received in reimbursement of taxes on property 
jointly used shall be credited to account No. 508, "Joint facility rent 
income /* Amounts paid in reimbursement of such taxes shall be 
charged to account No. 541, "Joint facility rents.” 

Note E. — ^Taxes accruing on new lines under construction or on 
property acquired for the extension of existing lines or for addition 
or betterment purposes before the facilities are opened for commercial 
operation or the property acquired becomes available for service shall 
be charged to road and equipment accounts. 

533. UNCOLLECTIBLE RAILWAY REVENUES. 

This account shall include the amount of uncollected revenue 
charges against companies and individuals representing tariff charges 
for service rendered (including not only the accounting carrier's* 
revenue charges, but also charges advanced to other carriers) when 
such amounts have been^ during the period for .which rife income 
Account is stated, determined to be uncollectible. (See speciaL in- 
structions for the classification of operating revenues, section L) 

Note A.— This account shall not be construed tq relieve the carrier 
from its responsibility for collectmg the lawfully established charges. 

Note B. — This account sliall not include charges for service if it 
has not been performed in accordance with the contract and which, 
on that account, are not lawfully collectible from companies or in- 
dividuals, such as freight charges on lost or destroyed shipments. 

534. EXPENSES OF MISCELLANEOUS OPERATIONS. 

This account shall include the total expenses caused by the operation 
ol miscellaneous physical property the cost of which is indudiMe in 
balance-sheet account No. 705, "^Miscellaneous physical property” / 

Nom-^The expenses of miscellaneous nonoperating physical prop- 
erty shall be included in acaitwt No. 5U,"Mtscellaaeoua 
physical property.” / 




3 o 6 Analysis of Railroad Operations 

535. TAXES ON MISCELLANEOUS OPERATING PROPERTY. 

This account shall include accruals of taxes paid or payable upon 
miscellaneous operating property, such as that the cost of which is 
includible in account No. 705, “Miscellaneous physical property,” 

Note. — Taxes upon miscellaneous nonoperating physical property 
shall be included in account No. 544, “Miscellaneous tax accruals.” 

536. HIRE OF FREIGHT CARS— DEBIT BALANCE. 

This account shall include, except as provided for in the classifica- 
tion for investment in road and equipment, the net debit balance of 
(1) amounts receivable accrued for the use of the accounting com- 
pany’s freight cars leased or interchanged, and (2) amounts payable 
accrued for the use of the freight cars of other carriers, leased or 
interchanged, and for the use of freight cars of individuals and com- 
panies not carriers. (See general instructions, section 2.) 

Note A.— If the net balance is a credit, it shall be included in 
account No. 503, “Hire of freight cars — Credit balance.” 

Note B. — Rent for freight cars included in the lease of road to the 
accounting company shall be included in account No. 542, “Rent for 
leased roads,” 

Note C.— Interest accrued on equipment obligations shall be charged 
to account No. 546, “Interest on funded debt,” or No. 547, “Interest 
on unfunded debt,” as may be appropriate. 

Note D. — Rents paid for freight cars used in construction work- : 
train service are chargeable to the cost of the work. (See general 
instructions for the classification of investment in road and equipmehti 
section 4 c.) 

Note E.— A fair rent for freight cars used in construction work- 
train service shall be credited to account “Hire of freight cars.” 
(See general instructions for the classification of investment in road 
and equipment, section 4 c,) 

537. RENT FOR LOCOMOTIVES. 

This account shall include amounts payable accrued for the use 
of the locomotives of others, leased or interchanged, except as pro--. , 
vided for in the classification for investment in road and equipment ’ 
(See general instructions, section 2.) 

Note A. — ^The rent for locomotives included in the lease of road., 
to the accounting company shall be included m account No. 542, “Rent f 
for leased roads.” 

Note B.— Interest accrued on equipment obligations shall be charged 
to account No. 546, “Interest on funded debt,” or No. 547, “Interest 
on unfunded debt,” as may be appropriate. 

Note C. — Rent paid for locomotives used in construction work- 
train service is chargeable to the cost of the work. (See general in- . ' 
structions for the classification of investment in road and equipment,: > 
section 4 c.) 

538. RENT FOR PASSENGER-TRAIN GARS. , 

This account shall include amounts payable accrued for fl:\e‘ ^ 

; of the passenger-train cars of others, leased or interchanged ^hd ^iso? 



Appendix C 307 

for use of sleeping cars operated under contract arrangement, except 
as provided for in the classification for investment in road and 
equipment (See general instructions, section 2.) 

Note A. — ^The rent for passenger-train cars included in the lease 
of road to the accounting company shall be included in account No. 
542, “Rent for leased roads.” 

Note B. — Interest accrued on equipment obligations shall be charged 
to account No. 546, “Interest on funded debt,” or No. 547, “Interest 
on unfunded debt,” as may be appropriate. 

539. RENT FOR FLOATING EQUIPMENT. 

This account shall include amounts payable accrued for the use of 
the floating equipment of others, leased or chartered, except as 
provided for in the classification for investment in road and equipment 
(See general instructions, section 2.) 

Note A.— The rent of floating equipment included in the lease of 
road to the accounting company shall be included in account No. 542, 
“Rent for leased roads.” 

Note B,— Interest accrued on equipment obligations shall be charged 
to account No. 546, “Interest on funded debt,” or No. 547, “Interest 
on unfunded debt,” as may be appropriate. 

540. RENT FOR WORK EQUIPMENT. 

This accotmt shall indude amounts payable accrued lor the use 
of the work equipment of others, leased or interchanged, except as 
provided for in the classification for investment m road and equip- 
ment. (See general instructions, section 2.) 

Note A.— The rent for work equipment induded in the lease of 
road to the accounting company shall be included in account No. 542, 
“Rent for leased roads.” 

Note B.-r-Interest. accrued on equipment obligations shall be charg^ 
to account No. 546, “Interest on funded debt,” or No. 547, “Interest 
on unfunded debt,” as bay be appropriate. 

Note C— Rent paid for work equipment when used in constructioa 
work-train service is chargeable to the cost of the work, (Sec 
general instructions for the classification of investment in road and 
equipment, section 4 c.) 

541. JOINT FACILITY RENTS. 

This account shall include amounts payable accrued as rent for 
tracks, yards, terminals, and other facilities owned or controlled 
by other carriers, companies, or individuals, and . in the joint use of 
which the accounting company participates. 

Amounts paid or payable by the accounting company in rcitiiH- 
bursement lor taxes on property jointly used shall be charged to this 
account 

Norn-— The cost of maintenance, operation, or administration of 
joint facilities, chargeable to the accounting company, shall be charged 
to the various joint facility accounts provided for operatiag expenses. 
When the compensation for the use of joint facilities is a fixed 
amount or is based upon a diaige per passenger, ton, car, or other 



3 o 8 Analysis of Railroad Operations 

unit, it shall be fairly apportioned between this account and the 
appropriate joint facility operating ^pense accounts. This appor- 
tionment shall be made by the operating company, and shall be fol- 
lowed by the accounting company. 

S42. RENT FOR LEASED ROADS. 

This account shall include amounts payable accrued as rent for 
roads, tracks, or bridges (including equipment and other railway 
property covered by the contract) of other companies, held under 
lease or other agreement by the terms of which exclusive use and 
control for operating purposes are secured. The entire amount of 
rent payable by the lessee in accordance with the agreement shall be 
included in this account, whether paid to the lessor in cash or dis- 
bursed by the lessee, on behalf of the lessor, as interest on funded 
debt, guaranteed dividends on stock, or otherwise. (See general 
instructions, section 2.) 

Note A. — When taxes on leased property are assumed by the 
lessee the accruals of such taxes shall be included in the lessee’s 
account No. 532, “Railway tax accruals.” 

Note B. — If, under the terms of a lease, the deficit or any portion 
of if resulting from the lessee’s operation of the property leased 
is payable by the lessor company, the amount shall be charged to 
account No. 509, “Income from lease of road,” by the lessor and 
credited to this account by the lessee. 

Note C. — If property, the rent of which is chargeable to this ac- 
count, is sublet by the accounting company to others, the rent from 
the sublease shall be credited to account No. 509, “Income from 
lease of road,” 

Note D, — Payments for the exclusive use of road and equipment 
maintained by the lessor and used in the accounting company’s 
operations (when considerable in amount and when not provided for 
in the classifications of operating expenses) shall be divided into 
two portions : One, representing cost of maintenance, shall be 
charged to the appropriate maintenance accounts and the other, 
representing rent (amount applicable to the investment in the prop- 
erty), shall be charged to this account. 


543. MISCELLANEOUS RENTS. 

This account shall include rents payable accrued on property held 
by the accounting company under lease or other agreement and not 
properly chargeable to any of the foregoing accounts. 


Note A.—* This account shall not include rents provided for in the 
operating expense accounts. 

Note B. — If property, the rent of which is chargeable to this 
account, is sublet by the accounting company to others, the rent 
from the sublease shall be credited to account No. 510, “Miscellaneous 
rent income.” 

Note C. — Payments for the escclusive use of miscellaneous property 
maintained by the lessor and used by the accounting company shall 
be divided into two portions: One, represeiiting the cost of main-, 
tenance, shall be charged to the appropriate operating accounts, and,,, 
the other, representing rent (amount applicable to the-inyestment: 



Appendix C 309 

in the property), shall charged to this account The bill rendered 
by the creditor shall show the distribution o£ the payments as between 
maintenance and rent, and such distribution shall be adhered to by 
the debtor. 

544. MISCELLANEOUS TAX ACCRUALS. 

This account shall include all accruals for taxes not provided for 
elsewhere, such as taxes on securities owned, taxes on income from 
securities owned, and taxes on miscellaneous nonoperating physical 
property the cost of which is includible in balance-sheet account No, 
705, “Miscellaneous physical property.” 

Note A.— "V^Tien the proper separation of any particular tax is not 
ascertainable the entire amount shall be included in account No. 532, 
“Railway tax accruals.” 

Note B.— Taxes upon miscellaneous operating property shall be 
charged to account No. 535, “Taxes on misceilaneous operating 
property.” 

545. SEPARATELY OPERATED PROPERTIES«-LOSS. 

This account shall include amounts payable under the terms ol 
agreements or contracts whereby the deficit resulting from the opera- 
tion by others of properties of other companies having a separate 
corporate existence is to be paid, in vrhole or in part, by the account- 
ing company. 

In determining the amount payable by the ^ accounting company, 
consideration shall be given not only to the operating revenues and 
operating expenses, but also to other items of income or deduction 
which affect that amount 

Note A.— The amount receivable by the operating company shall 
be credited by it to account No. 51^ “Contributions from other 
companies.” 

Note B.-— Dividends or other returns upon securities issued by 
separately operated companies and held or controlled by the accounting 
company . shall not be included in this account to offset a deficit 
payable, but in account No. 513, “Dividend income”; No. 514, “Income 
from funded securities”; or No. 515, “Income from unfunded securities 
and accounts,” as may be appropriate. 

546. INTEREST ON FUNDED DEBT. 

This account shall include the current accruals of interest on all 
classes of debt, the principal of which Is includible in balance-sheet 
account No. 755, “Funded debt unmatured,” or No. 757, “Non- 
negotiable debt to affiliated companies”; also interest accruals on de- 
benture stock and on receiver's certificates issued for a term of more 
than one year. This account shall be kept in such form that the 
interest on debenture stock, on receivers’ certificates, and on other 
class of funded debt may be shown separately in the annual rt^ort 
to the Commission. 

Note A/-This account shall not include charges for interest on 
fund^ debt obligattons issued or ass^d by ike amunting company 



Analysis of Railroad Operations 

and owned by it, whether pledged as ctfltateral or held in its treasury, 
in special deposits, or in sinking or other reserve funds. (See account 
No. 552, “Income applied to sinking and other reserve funds.”) 

Note B.— When funded debt is incurred for new lines or extensions, 
or for addition and betterment purposes, the accruals of interest on 
such funded debt (less interest received on unexpended balances), 
to the date of completion or coming into service of the property so 
acquired shall be included in the road and equipment accounts. 


S47. INTEREST ON UNFUNDED DEBT. 

This account shall include interest accrued on unfunded debt, such 
as short-term notes payable on demand or having dates of maturity 
one year or less from dates of issue, interest on receiver's certificates , 
issued for a term of one year or less, interest on matured funded 
securities and open accounts including interest on overcharge claims, 
discount and expense on demand and short-term loans, interest on 
receipts outstanding for installments paid on capital stock, and other . ' 
analogous items. The discount on short-term notes, if of a consid- 
erable amount, shall be distributed, through equal monthly charges, 
over the term of the notes. 


Note.— When short-term notes or other evidences of unfunded 
indebtedness are issued for new lines or extensions or for addition 
and betterment purposes the accrual of interest to the date of com- ; 
pletion or cominp: into service of the property shall be included in 
the road and equipment accounts. 

548, AMORTIZATION OF DISCOUNT ON FUNDED DEBT. . . 

This account shall be charged during each fiscal period with the ; ' 
proportion of the discount and expense on funded debt obligations 
applicable to that period. This proportion shall be determined accord- 
ing to a rule the uniform application of which through the interval : I 
between the date of sale and the date of maturity will extinguish the . 
discount and expense on funded debt. The charge to this account ;; 
for any period must not be either greater or less than the proportion ' 
of the balance remaining unamortized applicable to that period so ^ 
long as any portion of the discount and expense remains unextin-; ; ; 
guished. (See special instructions for balance-sheet accounts, section 
3 .) 


Note. — The accounting company may, at its option, charge to prpfU i 
and loss account No. 617, “Debt discount extinguished through sur- 
plus,” all or any portion of the discount and expense on funded debt ; 
remaining at any time unextinguished. ; 4 


549. MAINTENANCE OF INVESTMENT ORGANIZATION. 

This account shall include the directly assigxiable org^izatipn and 
administration expenses of the accotmting company which are incident 
to its investments in leased or nonoperating physical property, and 
■ . ; \m stoAs, boiids, ot other securities;'’ ' 




Appendix C 


3 « 


ITIJiIS OF EXPENSE 

Advertising annual reports (lessor companies only). 

Calls for bonds in accordance with sinking fund provisions of mortgages. 

Directors* fees. 

Printing and^ mailing dividend checks. 

Publishing and mailing annual reports and other corporate statements to ^arc* 

holders. 

Publishing notices of declaration of dividends. 

Law expenses. 

OfSce, expenses. 

Salaries of ofHcers, clerks, and attendants. 

Stationery and printing. 

Note. — Organization and administration expenses incident to rail- 
way operation are provided for in operating expense general account 
VII, General. 

SSO. INCOME TRANSFERRED TO OTHER COMPANIES. 

This account shall include the whole or any portion of the income 
of the accounting company payable to another company under the 
terms of agreements or contracts without obligation for reimburse- 
ment 

In determining tihe amount payable by the accounting company, con- 
sideration shall be given not only to operating revenues and operating 
expenses, but also to other items of income or deduction Which 
affect that amount. 

Note A. — The amount receivable by the other company shall be 
credited by it to account No. 512, “Separately operated properties-— 
Profit.** 

Note B. — Dividends or other payments upon securities issued or 
assumed by the accounting company shall not be included in this . 
account 

55L MISCELLANEOUS INCOME CHARGES. 

Tlus account shall include all Items in the nature of fixed charges 
properly chargeable to Income Account for a fiscal period not provided 
for elsewhere, such jis “normal** and “additionar income tax upon the 
interest on accounting company*s funded debt when assumed by it 

552. INCOME APPLIED TO SINKING AND OTHER RESERVE 
FUNDS. 

This account shall include amounts applied to sinking and other 
reserve funds from income, whether definite appropriations from 
income; allotments or payments of definite amounts from income 
under the terms of mortgages, deeds of trust, or other contracts 
that provide for such allotments or payments; or accretions repref- 
senting interest or other returns accrued on the contents of such 
funds and required to be retained therein. 

Note A,— The amounts charged to this account shall be concur* 

, rcntly credited to balance-sheet accounts Nos, 773, 781, 782, and 783, 

■ as may be appropriate. , ^ 




312 Analysis of Railroad Operations 

Note B. — Similar appropriations made from surplus shall be charged 
to profit and loss account No. 613, “S^irplus applied to sinking and 
other reserve funds.” 

553. DIVIDEND APPROPRIATIONS OF INCOME. 

This account shall include amounts definitely declared payable from 
the income of the fiscal period, as dividends on actually outstanding 
capital stock issued or assumed by the accounting company, other 
than debenture stock. (See definition of the several classes of capital 
stock in balance-sheet account No. 751, ^'Capital stock.”) If a 
dividend is not payable in cash the consideration shall be described 
in the entry with sufficient particularity to identify it. 

This account shall be subdivided so as to show separately the 
dividends on the various subclasses of capital stock. 

Note A. — Interest accrued on debenture stock shall be charged to 
account No. 546, “Interest on funded debt.” 

Note B. — This account shall not include charges for dividends on 
capital stock issued or assumed by the accounting company and owned 
by it, whether pledged as collateral, or held in its treasury, in special 
deposits, or in sinking or other reserve funds. (See account No. 
552, “Income applied to smking and other reserve ftmds.”) 

Note C. — This account shall be used when the appropriations are 
definitely made chargeable to Income. Similar appropriations made 
from surplus shall be charged to profit and loss account No. 614, 
“Dividend appropriations of surplus.'* 

554. INCOME APPROPRIATED FOR INVESTMENT IN PHYSICAL 

PROPERTY, 

This account shall include amounts definitely appropriated from 
income to be applied for the construction or acquisition of new lines 
and extensions and of additions to and betterments of property, the 
cost of which is chargeable to road and equipment accounts or ap- 
plied for the construction or acquisition of property, the cost of 
which is includible in balance-sheet account No. 705, “Miscellaneous 
physical property,” 

Records of the accounting carrier shall be so kept that the appro- 
priations charged to this account for any fiscal period may be dis- 
tinguished as relating to (a) amounts expended during preceding 
fiscal periods, (b) amounts expended during the current fiscal period, 
and (c) amounts held in reserve. 

The records shall also show separately appropriations for investment 
in road and equipment and for investment in miscellaneous physical 
property. 

Note A. — Similar appropriations made from surplus shall be 
charged to profit and loss account No. 615, “Surplus appropriated for 
investment in physical property.” 

Note B.—The amounts charged to this account shall be, cpncurr 
rently credited to balance-sheet account No. 779, “Additions to prop- . 
erty through income and surplus,” to No. 782, “Miscellaneous fund 
reserves,” or to No. 783, “Appropriated surplus not specifically in- 
vested,” as may be appropriate. 



Appendix C 313 

555. STOCK DISCOUNT EXTINGUISHED THROUGH INCOME* 

This account shall include amounts definitely appropriated from 
income to reduce or extinguish the amount of discount on capital 
stock issued by the accounting company. (See balance sheet account 
No. 724, “Discount on capital stock.”) 

Note. — Similar appropriations made from surplus shall be charged 
to profit and loss account No. 616, “Stock discount extinguished 
trough surplus.” 

556. MISCELLANEOUS APPROPRIATIONS OF INCOME. 

Except as provided in account No. 552, “Income applied to sinldttg 
and other reserve funds,” this account shall include amounts definitely 
appropriated from income for the discharge of the principal (less 
the discount, if any, suffered at the time of sale) of any indebtedness 
incurred in the acquisition or improvement of property carried in the 
road and equipment accounts; also amounts similarly appropriated to 
provide a reserve for doubtful accounts, and for other purposes not 
provided for elsewhere. 

Note.— Similar appropriations made from surplus shall be charged 
to profit and loss account No. 618, “Miscellaneous appropriations of 
surplus.” 



314 


Analysis of Railroad Operations 
FORM OF INCOME STATEMENT 


Explanatory Note.— T he classified form of income statement is designed 
to show the financial changes resulting from transportation operations 
and other business of the accounting company during any specified period 

I. Operating Income: 

501. *Railway operating revenues. 

531. ^Railway operating expenses. 

♦Net revenue from railway operations. 

532. *Railway tax accruals. 

533. ♦Uncollectible railway revenues. 

♦Railway operating income. 

502. Revenues from miscellaneous operations. 

534. Expenses of miscellaneous operations. 

Net revenue from miscellaneous operations. 

535. Taxes on miscellaneous operating property. 

Miscellaneous operating income. 

Total operating income. 

II. Nonoperating Income: 

503. Hire of freight cars — Credit balance. 

504. Rent from locomotives, 

505. Rent from passenger-train cars. 

506. Rent from floating equipment. 

507. Rent from work equipment 

508. Joint facility rent income. 

509. Income from lease of road. 

510. Miscellaneous rent income. 

511. Miscellaneous nonoperating physical property. 

512. Separately operated properties — Profit. 

513. Dividend income. 

514. Income from funded securities. 

515. Income from unfunded securities and accounts. 

516. Income from sinking and other reserve funds. 

517. Release of premiums on funded debt 

518. Contributions from other companies. 

519. Miscellaneous income. 

Total nonoperating income. 

Gross income (or loss). 

III. Deductions from Gross Income: 

536. Hire of freight cars— Debit balsmce. 

537. Rent for locomotives. 

538. Rent for passenger^train cars, 

^IndttdM of water fiuesr if «xty* : ^ ^ 




3^5 


Appendix C 

539. Rent for floating equipment. 

540. Rent for work equipment. 

541. Joint facility rents. 

542. Rent for leased roads. 

543. Miscellaneous rents. 

544. Miscellaneous tax accruals. 

545. Separately operated properties— Loss. 

546. Interest on fimded debt. 

547. Interest on unfunded debt. 

548. Amortization of discount on funded debt. 

549. Maintenance of investment organization. 

550. Income transferred to other companies. 

551. Miscellaneous income charges. 

Total deductions from gross income. 

Net income (or loss). 

IV. DisPOsmoN OF Net Income: 

552. Income applied to sinking and other reserve funds. 

553. Dividend appropriations of income. 

554. Income appropriated for investment in physical property, 

555. Stock discount extinguished through Income. 

556. Miscellaneous appropriations of income. 

Total appropriations. 

Income balance transferred to credit (or debit) of Profit 
and Loss. 



Analysis of Railroad Operations 


316 

SPECIAL INSTRUCTIONS FOR 
PROFIT AND LOSS ACCOUNTS. 


1. Profit and Loss Accounts Defined. — Profit and loss accounts are 
those designed to show the changes in the corporate surplus or deficit 
during each fiscal period, as effected by the operations and business trans- 
actions during that period, by any disposition of net profits made solely 
at the option of the accounting company, by accounting adjustments of 
matters not properly attributable to the period, or by miscellaneous gains 
or losses not provided for elsewhere; and to show also the unappropriated 
surplus of the carrier at the date of the balance sheet. 

2. Delayed Items. — ^VVhen no provisions have been made through entries 
in the operating revenue, operating expense, or other income accounts for 
anticipating delayed items chargeable or creditable thereto, and the amount 
of any such item is relatively so large that its inclusion in the accounts 
for a single year would seriously distort those accounts, the carrier, when 
so authorized upon application to the Interstate Commerce Commission, 
shall distribute to Profit and Loss so much of the amount as may be 
authorized. The application to the Commission for exceptional accounting 
for delayed items shall give full particulars concerning each item and the 
reasons which, in the carrier’s judgment, indicate the need for a special 
accounting rule. 

Delayed items are items representing transactions which occurred before 
the current fiscal year. 



Appendix C 317 

TEXT PERTAINING TO PROFIT AND LOSS ACCOUNTS. 


I. CREDITS. 

601. CREDIT BALANCE (AT BEGINNING OF FISCAL PERIOD). 

This account shall include the net credit balance in the Profit and 
Loss Account at the beginning of the fiscal period. 

602. CREDIT BALANCE TRANSFERRED FROM INCOME. 

This account shall show the net credit balance brought forward 
from the Income Account for the fiscal period. 

603. PROFIT ON ROAD AND EQUIPMENT SOLD. 

This account shall include the proceeds from the sale of road and 
equipment property in excess of the amount at which such property 
was carried in the property account at the time of sale. 

604. DELAYED INCOME CREDITS. 

This account shall include relatively large credits relating to operat- 
ing revenue, operating expense, and other income accounts of previous 
fiscal periods. 

This account shall be used only after permission of the Interstate 
Commerce Commission has been obtained. (See section 3 of the 
general instructions for the classification of operating revenues and 
operating expenses, section 2 of the special instructions for income 
accounts, and section 2 of the special instructions for this classification.) 

Note.— Except as provided for above, delayed items relating to 
operating revenue, operating expense, and other income items shall 
be included in the appropriate revenue, expense, or other incotne 
accounts for the fiscal period in which the audit of the items occurs. 

a^NREFUNDABLB OVERCHARGES. 

This account shall include the amount of revenue overcharges 
which are determined during the current fiscal period to be unrefund- 
able, (See section 1 of spedal instructions for the classification of 
operating revenues.) 

606. DONATIONS. 

This account shall include amounts, creditable to surplus, of cash or 
its equivalent in estimated money value at the time of acquisition 
of lands or other property donated by individuals or companies for 
the construction or acquisition of property. It shall also include dona- 
tions made by individuals and companies in connection with the 
construction of new lines for the purpose of compensating the carrier 
for loss anticipated during the early period of operation. 

Any advances made by individuals or companies with absolute or 
conditional provision for partial or complete reimbursement shall 



3 i 8 Analysis of Railroad Operations 

not be considered a donation prior to the fulHllment of all conditions, 
and then only to the extent to which the liability for reimbursement is 
nullified or negatived. Prior to such determination the amounts 
received shall be credited in balance-sheet account No. 778, “Other 
unadjusted credits.” 

Note. — Donations made by States, municipalities, and other public 
corporations as their contributions toward the construction or acquisi- 
tion of property shall be included in balance-sheet account No. 7S4, 
“Grants in aid of construction.” 

607. MISCELLANEOUS CREDITS. 

This account shall include amounts, not provided for elsewhere, 
transferred from other accounts to Profit and Loss, and amounts 
representing increases of resources not properly assignable to the 
income accounts. Among the items which shall be included in this 
account are — 

Adjustments or cancellations of balance-sheet accounts. 

Cancellation of balance-sheet accounts representing unclaimed wages < 
and vouchered accounts written off because of carrier’s inability to 
locate the creditor. 

Profit derived from the sale of investment securities. 

Profit derived from the sale of property carried in balance-sheet 
account No, 70S, “Miscellaneous physical property,” 

Credits resulting from adjustments required to bring to par securities 
issued or assumed by the accounting company and reacquired at a 
cost less than the par value, 

Premiums on capital stock at the time of its reacquirement (see 
special instructions for balance-sheet accounts, section 2) , 

Unreleased premiums on funded debt reacquired before maturity 
(see special instructions for balance-sheet accounts, section 3), 

Collections of old accounts previously written off. 

Nom — Revenue overcharges when determined to be unrefundable 
shall be credited to account No. 605, “Unrefundable overcharges ” 

11. DEBITS. 

611. DEBIT BALANCE (AT BEGINNING OF FISCAL PERIOD). 

This account shall include the debit balance in the Profit and Loss 
Account at the beginning of the fiscal period. 

612. DEBIT BALANCE TRANSFERRED FROM INCOME. 

This account shall show the net debit balance brought forward 
from the Income Account for the fiscal period. 

613. SURPLUS APPLIED TO SINKING AND OTHER RESERVE 

FUNDS. 

This account shall include amounts definitely appropriate froxnv ^ 
surplus and applied to sinkiiig and other reserve funds; and allotr'v r 



Appendix C 319 

ments or payments of definite amounts from surplus into sinking 
and other reserve funds under the terms of mortgages, deeds of 
trust, or other contracts that provide for such allotments or payments. 

Note A.—The amounts charged to this account shall be concur- 
rently credited to the appropriate balance-sheet accounts. 

Note B. — Similar appropriations made from income shall be charged 
to income account No. 5S2, “Income applied to sinking and other 
reserve funds.” 

614. DIVIDEND APPROPRIATIONS OF SURPLUS. 

This account shall include amounts definitely declared payable from 
surplus as dividends on actually outstanding capital stock issued or 
assumed by the accounting company, other than debenture stock. (See 
definition of the several classes of capital stock in balance-sheet 
account No. 752, “Capital stock.”) If a dividend is not i^yable in 
cash the consideration shall be described in the entry vrith sufficient 
particularity to identify it 

This account shall be subdivided so as to show separately the divi- 
dends on the various subclasses of capital stock 

Note A.— Interest accrued on debenture stock shall be charged to 
income account No. 546, “Interest on funded debt” 

Note B.— This account shall not include charges for dividends on 
capital stock issued or assumed by the accounting company and owned 
by it, whether pledged as collateral or held in its treasury, in special 
deposits, or in sinking or other reserve funds. (See account No. 613^ 
“Surplus applied to sinking and other reserve funds.”) 

Note C.-^Similar appropriations made from income shall be charged 
to inpome account No. 553, “Dividend appropriations of income.” 

615. SURPLUS APPROPRIATED FOR INVESTMENT IN PHYS- 

ICAL PROPERTY. 

This account shall include amounts definitely appropriated from sur- 
plus, to be applied for the construction or acquisUion of new lines 
and extensions and of additions to and betterments of property the 
cost of which is includible in the road and equipment accounts or 
applied for the construction, acquisition, or improvement of property 
the cost of which is includible in balance-sheet account No. 765, 
“Miscellaneous physical property,” and also the amount of donations 
in aid of construction, made by individuals and companies, not sttbj«^ 
to distribution as dividends. 

Records of the accounting carrier shall be so kept that the appro- 
priations charged to this account for any fiscal period may be dis- 
tinguished as relating to (p) amount expended during preceding fiscal 
periods, (b) amounts expended during the current fiscal period and 
(f) amounts held in reserve. 

Note A.-"Similar appropriations made from incoihe shall he charged 
to mcome account No. 554, 'Tncome appropriated for investment in 
physical property.” ' 



320 Analysis of Railroad Operations ; 

Note B.— The amounts charged to this account shall be concur- 
rently credited to balance-sheet account No. 779, “Additions to property 
through income and surplus,” to No. 782, “Miscellaneous fund re- 
serves,” or to No. 783, “Appropriated surplus not specifically in- 
vested,” as may be appropriate. 

616. STOCK DISCOUNT EXTINGUISHED THROUGH SURPLUS. 

This account shall include amounts definitely appropriated from 
surplus to reduce or extinguish the amount of discount on capital 
stock issued by the accounting company. (See special instructions for 
balance-sheet accounts, section 2.) 

Note. — Similar appropriations made from income shall be charged 
to income account No. SSS, “Stock discount extinguished through 
income.” 

617. DEBT DISCOUNT EXTINGUISHED THROUGH SURPLUS. 

This account shall include appropriations of surplus made, at the 
option of the accounting company, to reduce or extinguish the discount 
and expense on funded debt. (See income account No. 548, “Amor- 
tization of discount on funded debt,” and balance-sheet account No. 
725, “Discount on funded debt.”) 

618. MISCELLANEOUS APPROPRIATIONS OF SURPLUS. 

This account shall include amounts definitely appropriated from 
surplus to provide a reserve for doubtful accounts and, except as 
provided in account No. 613, “Surplus applied to sinkmg and other 
reserve funds,” for the discharge of the principal (less the discount, 
if any, suffered at the time of sale) of any indebtedness incurred in 
the acquisition or improvement of property carried in the road and 
equipment accounts; also other amounts appropriated from surplus 
and not provided for elsewhere. 

Note.— Similar appropriations from income shall be charged to , 
income account No, 556, “Miscellaneous appropriations of income.” 

619. LOSS ON RETIRED ROAD AND EQUIPMENT. 

This account shall include charges to Profit and Loss as provided 
for in the classification of investment in road and equipment^ on Sic- 
count of (1) road which has been abandoned, sold, or otherwise re- 
tired; and (2) equipment which has been abandoned, sold, or other- 
wise retired. (See general instructions, section 8, and general account . 
II, Equipment, in the classification of investment in road and equip- 
ment.) 

620. DELAYED INCOME DEBITS. 

This account shall include relatively large debits relating to operating 
revenue, operating expense, and other income accounts of preybusE 
. fiscal periods. 

This account shall be used only after permisdoin of ^ Interstate 
Commerce Cpnmssion has htm pbtamed, < See section 5 of the ^ 



Appendix C 321 

eral instructions for the classification of operating revenues and operat- 
ing expenses, section 2 of the special instructions for the income 
accounts, and section 2 of the special instructions for this classihca- 
tion.) 

Note A. — ^Except as provided above, delayed items relating to op- 
erating revenue, operating expense, and other income items shall be 
included in the appropriate revenue, expense, or other income account 
for the fiscal period in which the audit of the items occurs. 

Note B. — ^All entries in this account shall be made in such detail as 
will indicate the operating revenue, operating expense, or other in- 
come accounts to which they relate. 

621. MISCELLANEOUS DEBITS. 

This account shall include amounts, not provided for elsewhere, 
chargeable to Profit and Loss from otlier accounts, amounts written 
oS in consequence of adjustments, and payments not properly charge- 
able to the income accounts. Among the items which shall be charged 
to this account are— 

Adjustments or cancellations of balance-sheet accounts, 

Losses or deficits not properly chargeable to Income, such as un- 
collectible bills (other than bills covering revenue charges) for which 
no reserve has been provided. 

Losses resulting from the sale of investment securities, 

Losses resulting from the sale, destruction, or abandonment of 
property carried in balance sheet account No. 705, **Mtscellan^ou$ 
physical property,** 

Debits resulting from adjustments required to bring to par securi- 
ties issued or assumed by th^ accounting company and reacquired at 
a cost exceeding the' par value, 

Adjustments of the difference between the ledger value and estimated 
value of land withdrawn from railway service and charged to account 
No. 70S, ‘‘Miscellaneous physical property.** (See general instructions 
in the classification of investment in road and equipment, section 10.) 

Discounts on stock remaining unextinguished at the time of its 
reacquirement, 

Unextinguished discounts on funded debt reacquired before ma- 
turity, 

Payments of old accounts previously written of, 

Penalties and fines for violation of the Act to Regulate Uommerce, 
or other Federal laws, when not specifically provided for elsewhere. 

Note.— Revenue charges when determined to be uncollectible shall 
be charged to income account No. 535, “Uncollectible railway 
revenues.*' 



322 


Analysis of Railroad Operations 


SPECIAL INSTRUCTIONS FOR 
GENERAL BALANCE SHEET ACCOUNTS. 


1. Balance-sheet Accounts. — Balance-sheet accounts are those show- 
ing the assets, liabilities, and corporate surplus or deficit of the business. 

2. Discount and Premium on Capital Stock.— Ledger accounts shall 
be provided to cover the discounts and premiums at the sale or resale 
of each subclass of capital stock issued or assumed by the. company. 
The total of the net debit balances remaining in these several accounts 
shall be included in account No. 724, “Discount on capital stock,” and the 
total of the net credit balances in account No. 753, “Premium on capital 
stock.” For explanation of subclass see account No. 751, “Capital stock.” 

By the term discount is meant the excess of the par value of stocks 
actually issued or assumed over the actual money value of the considera- 
tion received for such stocks. By the term premdum is meant the excess 
of the actual money value of the consideration received for stock actually 
issued or assumed over the par value of such stock. 

The term premium is not intended to include amounts received repre- 
senting expected dividends considered to have accrued since the last divi- 
dend period in case of stocks on which dividends are regularly paid, nor is 
discount, as above defined, intended to be diminished by any such amount 
representing expected dividends explicitly stated in the price at which the 
stock is issued. 

Entries in these accounts representing discounts shall be carried therein 
until offset (1) by premiums realized on subseq^uent sales of the same 
subclass of stock, (2) by assessments levied on the stockholders, (3) by 
appropriations of income or surplus for that purpose, or (4) by charges 
to Profit and Loss upon reacquirement of the stock. Entries in these 
accounts representing premiums realized shall be carried therein 
until offset (1) by discounts suffered on sales of the same subclass 
of stock, or (2) by credits to Profit and Loss upon reacquirement of the 
stock. 

In case the accounting company is permitted and elects to distribute 
all or any part of the net premium on its capital stock to its stockholders, 
the amount thus distributed shall be charged to the premium account. 

For the purpose of tills classification the premium realized at the sale of 
capital stock shall not be considered a profit and loss item, except upon 
the reacquiremexit of the stock sold. 

In no case shall discount on capital stock be charged to or included in 
any account as a part of the cost of acquiring any property, tangible or 
intangible, or as a part of the cost of operation. 

When stock which has been issued or assumed by the accounting com- 
pany is reacquired, the difference between the price paid and the par 
value of the stock shall be credited to Profit and Loss account No. 607, 



Appendix C 323 

“Miscellaneous credits,” or charged to account No. 621, “Miscellaneous 
debits,” as may be appropriate. Concurrently the premium or discount 
account for the particular issue of stock reacquired shall be adjusted 
through Profit and Loss to the extent of the premium or discount ap- 
plicable to the shares reacquired. In case the premium realized or dis- 
count suffered at the prior sale of the stock reacquired has been included 
in an asset account other than the premiums and discounts account, such 
asset account shall be concurrently adjusted through Profit and Loss to 
the extent of the premium or discount previously included therein with 
respect to the shares reacquired. 

3. Discount, Expense, and Premium on Funded Debt.— Ledger ac- 
counts shall be provided to cover the discounts, expense, and premiums 
at the sale or resale of each subclass of funded debt and of receiver’s 
certificates issued for the benefit of or assumed by the company. For 
explanation of subclass see account No. 755, “Funded debt unmatured.” 

By the term discount is meant the excess of the par value of funded 
debt securities (of whatever kind) issued or assumed, and the accrued in- 
terest thereon, over the actual cash value of the consideration received for 
such securities. 

By the term premium is meant the excess of the actual cash value of the 
consideration received for funded debt securities (of whatever kind) 
issued or assumed over the par value of sudh securities and the accrued 
interest thereon. 

By the term expense is meant all expense in connection with the issue 
and sale of evidences of debt, such as fees for drafting mortgages and trust 
deeds ; fees and taxes for issuing or recording mortgages and trust deeds ; 
cost of engraving and printing bonds, certificates of indebtedness, and other 
negotiable paper having a life of more than one year; fees paid trustees 
provided for in mortgages and trust deeds; fees paid for legal services 
to trustees relative to mortgage securities; fees and commissions paid 
underwriters and brokers for marketing such evidences of debt ; and other 
like expense. 

The total of the net debit balances remaining in these several accounts 
should be included in account No. 725, “Discount on funded debt,” and the 
total of the net credit balances in account No. 772, “Premium on funded 
debt.” 

Each fiscal period there shall be charged to income account No. 548, 
“Amortization of discount on funded debt,” a proportion (based upon the 
ratio of such fiscal period to the remaining life of the respective securities 
reckoned from the beginning of the period to the date of maturity of the 
debt to which the charges relate) of each of the debit balances in these 
accounts, and correspondingly there shall be credited to income account 
No. 517, “Release of premiums on funded debt,” a similar proportion of,, 
each of the credit balances in these accounts. Carriers are allpwed the 
option of extinguishing at any time, through charges to Profit and Loss, 
all or any portion of the debit bal^cei remaining in any of these accounts 



324 Analysis of Railroad Operations 

and of deferring the extinguishment of credit balances until the maturity 
of the obligations represented. 

When any funded debt which has been actually issued to bona fide 
holders for value is reacquired by the accounting company, that proportion 
of the balance remaining in the accounts containing discount, expense, and 
premium on funded debt for the subclass of the security reacquired ap- 
plicable to the portion reacquired shall be credited or charged thereto, as 
may be appropriate, and concurrently charged or credited to Profit 
and Loss, Such proportion shall be based upon the ratio of the par 
value of the security reacquired to the par value of all the securities of 
the subclass actually outstanding immediately before such reacquirement. 

In case, however, the premium realized or discount suffered at the prior 
sale of the securities reacquired has been included (in excess of the 
amount authorized in the text of road and equipment account No, 76, 
“Interest during construction*’) in an asset account othe^r than the 
premiums and discounts account, such asset account shall be concurrently 
adjusted through Profit and Loss to the extent of such excess of the 
premium or discount previously included therein with respect to the 
securities reacquired. 

Except as provided for in road and equipment account No, 76, “Interest 
during construction,” no discount and expense on funded debt shall be 
charged to or included in any account as a part of the cost of acquiring 
any property, tangible or intangible, or as a part of the cost of operation. 

4. Contingent Assets and LiABiLiTiES.—Contingent assets and liabili- 
ties shall not be included in the body of the balance-sheet statement, but 
shall be shown in detail in a supplementary statement accompanying the 
balance-sheet statement. Contingent assets are those without value to 
the accounting company until the fulfillment of conditions regarded as 
uncertain. Contingent liabilities include items which may, under certain 
conditions, become obligations of the company, but are neither direct nor 
assumed obligations on the date of the balance sheet. 

5. Book Value of Securities OwNEa>.— The accounting company is 
allowed the option of carrying its investments in securities other than 
those issued or assumed by it either at cost or at a reasonable valuation 
other than cost. In recognition of this option the term ledger value is 
used in the text of the accounts representing securities owned. 

6. Income from Sinking Fund Assets.— Accrued interest on uninvested 
sinking fund cash on deposit in banks or trust companies, and accrued 
interest and other income arising from stocks, bonds, or other assets held 
in sinking and reserve funds shall be credited to account No. 516, “Income 
from sinking and other reserve funds,” and when required by the mortgage 
or other provision to be held in the funds shall be charged, according 
to the character of the funds, to account No. 703, “Sinking funds,” or to 
account No. 721, “Insurance and other funds,” and concurrently, if a reserve 
is required, an equal amount shall be charged to income account No;. 552, 



325 


Appendix C 

“Income applied to sinking -end other reserve funds” and credited to 
account No. 773, “Insurance and casualty reserves,” No. 781, “Sinking 
fund reserves,” or No. 782, “Miscellaneous fund reserves,” as the case may 
require. 

7. CuEHENT Assets. — In the group of accounts designated as current 
assets (accounts No. 708 to No. 719, inclusive) there shall not be included 
any item the ledger value of which is not reasonably assured by the 
known financial condition of the debtor. The amount of any item of a 
current character but of doubtful value shall be included in account 
No. 722, “Other deferred assets,” or written off through Profit and 
Loss, as may be appropriate. If desirable to retain a record of the item 
in the balance sheet, it may be stated at a nominal value in account 
No. 722, “Other deferred assets,” the difference between the full amount 
of the item and such nominal value being charged to Profit and Loss. 

8. Joint Liabilities.— The accounting company shall state as a liability 
in its balance sheet the total par value of securities jointly issued by 
it and others, and it shall include in account No. 722, “Other deferred 
assets,” the portion of such liability which, under the joint arrangement, 
it is expected will be liquidated by the other party or parties to the joint 
arrangement 



226 Analysis of Railroad Operations 

TEXT PERTAINING TO GENERAL BALANCE SHEET 
ACCOUNTS. 


DEBITS, 

701. INVESTMENT IN ROAD AND EQUIPMENT. 

This account shall include the accounting company’s investment in 
road and equipment (including that held under contract for purchase) 
in existence at the date of the balance sheet. The accounting com- 
pany’s records shall be kept in such manner as to show the amount 
credited to this account subsequent to June 30, 1914, for property 
retired, the cost of which was included in the account of that date. 

Note A. — This account shall not include any items representing 
titles to securities. 

Note B.— When any equipment is acquired under an agreement 
which provides that the cost shall be paid in installments, the cost 
(its money value at time of purchase) shall be charged to the appro- 
priate road and equipment accounts at the time of its acquisition, and 
included in this account in the same manner as the cost of equip- 
ment purchased outright. When the par value of notes or other 
securities issued in payment, or in part payment, for such equipment 
is more (or less} than the actual cash value of the equipment at the 
time of the purchase, or of the proportion to which the securities are 
applicable, the difference between the par value of the securities and 
the actual cash value of the equipment, or of the proportion paid for 
by the securities, shall be charged (or credited) to the proper discount 
and premium accounts, 

702. IMPROVEMENTS ON LEASED RAILWAY PROPERTY. 

This account shall include the accounting company’s investment in 
additions and betterments made by it to railway property held under 
long-term lease or through control of the corporation owning the 
property and in existence at the date of the balance sheet. The ac- 
counting company’s* records shall be kept in such manner as to show 
the amount credited to this account subsequent to June 30, 1914, for 
property retired, the cost of which was included in the account at 
that date. The amounts included in this account shall be classified 
in the accounts provided in the classification for investment in road, 
and equipment. 

Note. — ^This account shall not include any items representing titles 
to securities. 

703. SINKING FUNDS. 

This account shall include the amount of cash, the ledger value of 
live securities of other companies, and other assets which are held by 
trustees of sinking and other funds for the purpose of redeeming out- 
standing obligations, including such assets so held in the hands of 
the accounting company’s treasurer whien the assets , are segr^ated 



Appendix C 327 

in a distinct fund; also amounts deposited with such trustees on ac- 
count of mortgaged property sold the proceeds of which are to be 
held for the redemption of securities, and the par value of live securi- 
ties issued or assumed by the accounting company and held in such 
funds. A separate account shall be kept for each fund. The title 
of each such account shall designate the obligation in support of 
which the fund is created. 

Note. — In stating the balance sheet in the annual reports to the 
Commission the total amount of the funds and the par value of securi- 
ties issued or assumed by the accounting company and held in the 
funds shall be shown in the short columns, and flie net amount of 
the funds (total amount less securities issued or assumed) shall be 
shown in the long column. 

704. DEPOSITS IN LIEU OF MORTGAGED PROPERTY SOLD. 

This account shall include funds deposited with trustees, to be held 
until mortgaged property sold is replaced. 

Note. — In stating the balance sheet in the annual reports to the 
Commission the total amount of the funds and the par value of securi- 
ties issued or assumed by the accounting company and held in the 
funds shall be shown in the short columns, and me net amount of 
the funds (total amount less securities issued or assumed) shall be 
shown in the long column. 

705. MISCELLANEOUS PHYSICAL PROPERTY. 

This account shall include the accounting company’s investments in 
physical property other than transportation property assignable to ac- 
counts Nos. 701 and 702, including hotels, restaurants, commercial 
power plants, etc., which are entirely distinct from transportation 
property and are not operated in connection with the transportation 
service of the accounting company. 

ITEMS OE INVESTMENT 

Coal and other mines. Mineral and timber lands. 

Commercial power plants. Rails and other track material lea^d 

Hotels and restaurants. to others. 

Lands and buildings not used in trans* Sawmills and other manufacturing 

portation operations. plants not operated in connection 

Lands and other property acquired and with transportation service. 

held in anticipation of future use, 

706. INVESTMENTS IN AFFILIATED COMPANIES. 

This account shall include the ledger value of the accounting com- 
pany’s investment advances to affiliated companies, also of its invest-^ 
ment in securities issued or assumed by such companies, such securities 
not being held in special deposits or in special funds. 

This account shall be subdivided : 

(a) Stocks, 

(b) Bonds. 

(c) Notes, including hereiri not only notes that rm longer than 

one year and all notes of afEliated companies Eeld as investments. 



328 Analysis of Railroad Operations 

but also notes payable on demand or within one year from the 

date of issue when it is mutually understood and intended that the 

notes shall not be enforced as current assets. 

(flf) Advances. 

The accounting company's record shall be kept in such manner that 
the ledger value of securities pledged as collateral security for any 
of the accounting company’s funded debt or short-term loans and 
the ledger value of securities unpledged may be shown separately in 
the annual report to the Commission. 

Note A.— Accounts with affiliated companies which are subject to 
current settlements, such as traffic and car-service balances, charges 
for material and supplies currently furnished, charges for repairs to 
equipment, etc., shall be classed as current assets or current liabilities, 
as may be appropriate. 

Note B. — The term affiliated companies includes: 

1. Controlled companies, including companies solely controlled by the 
accounting company, and also companies jointly controlled by the 
accounting company and others under a joint arrangement. 

2. Controlling companies, including both companies solely controlling 
the accounting company, and companies which jointly control the ac- 
counting company under a joint arrangement. 

3. Companies controlled by controlled companies. 

4. Companies controlled by controlling companies. 

By control is meant the ability to determine the action of a corpora- 
tion. For the purposes of this account, the following are to be con- 
sidered forms of control: 

(a) Right through title to securities issued or assumed to exercise 
the major part of the voting power in the controlled corporation. 

(b) Right through agreement of some character or through some 
source other than title to securities, to name the majority of the board 
of directors, managers, or trustees of the controlled corporation. 

(c) Right to foreclose a first lien upon all or a major part in value 
of the tangible property of the controlled corporation. 

(d) Right to secure control in consequence of advances made for 
construction of the operating property of the controlled corporation. 

(e) Right to control only in a specific respect the action of the 
controlled corporation. 

A leasehold interest in the property of a corporation is not to be 
classed as a form of control over the lessor corporation. 

Sole control is that which rests in one corporation. 

Joint control is that which rests in two or more corporations and 
which is held under a joint arrangement. 

Note C. — The value of securities borrowed by the accounting com- 
pany and pledged shall not be included in this account. 

Note D.— The value of securities pledged for purposes other than 
that of security for funded debt or short-term loans shall be included 
in account No. 703, “Sinking funds,” No. 704, “Deposits in lieu of 
mortgaged property sold,” No. 711, “Special deposits,” or No. 721, 
“Insurance and other funds,” as, may be appropriate. 

707. OTHER INVESTMENTS, 

This account shall include the ledger value of the accounting com- 
pany's investment advances to nonaffiliated companies and to . iti-, 
dividuals, and of its investment in securities issued or assumed by 



Appendix C 359 

such companies, such securities not being held in special deposits or 
in special funds; also tAiscellaneous investments not provided for 
elsewhere. 

This account shall be subdivided: 

(a) Stocks. 

(&) Bonds. 

(c) Notes, including herein not only notes that run longer 
than one year and all notes of nonaffiliated companies and of in- 
dividuals held as investments, but also notes payable on demand or 
within one year from date of issue when it is mutually understood 
and intended that the notes shall not be enforced as current assets. 

(d) Advances. 

{e) Miscellaneous. 

The accounting company’s records shall be kept in such manner that 
the ledger value of securities pledged as collateral security for any 
of the accounting company’s funded debt or short-term loans and the 
ledger value of securities unpledged may be shown separately in the 
annual report to the Commission. 

Note A. — ^Accounts with nonaffiliated companies which are subject 
to current settlements, such as traffic and car-service balances, charges 
for materials and supplies currently furnished, charges for repairs to 
equipment, etc., shall be classed as current assets or current liabilities, 
as may be appropriate. 

Note B.-r-The term nonaMiated companies includes all companies 
other than those defined as affiliated in Note B of account No. 706, 
“Investments in affiliated companies.” 

Note C. — The value of securities borrowed by the accounting com- 
pany and pledged shall not be included in this account. 

Note D. — The value of securities pledged for purposes other than 
that of security for funded debt or short-term loans shall be included 
in account No. 703, “Sinking funds,” No. 704, “Deposits in lieu of 
mortgaged property sold,” No. 711, “Special deposits,” or No. 721, 
“Insurance and other funds,” as may be appropriate. 

708. CASH. 

This account shall include money, checks, sight drafts, and sight 
bills of exchange in the hands of the accounting company’s financial 
officers and agents, or in transit from its agents and conductors for 
which such agents and conductors have received credit. It shall also 
include deposits with banks and trust companies subject to check. 
(See special instructions, section 7.) 

709. DEMAND LOANS AND DEPOSITS. 

This account shall include the amount of demand loans fully secured 
by stocks, bonds, and other marketable collateral, and of deposits 
with banks and trust companies when such items are subject to col- 
lection on demand. (See special instfuctions, section 7.) 

710. TIME DRAFTS AND DEPOSITS. : , ; ; ; ^ 

This account shdl indiide the amount; of tfme drifts redefvable 




'330 Analysis of Railroad Operations 

and time deposits with banks and trust companies. (See special in- 
structions, section 7.) ' 

711. SPECIAL DEPOSITS. 

This account shall include funds specially deposited (other than in 
sinking funds) for the payment of dividends, interest, and other debts ; 
also money and securities deposited to insure the performance of 
contracts to be performed within one year from the date of the 
balance sheet; and other deposits of a special nature not provided 
for elsewhere. (See special instructions, section 7.) 

Noto a. — S ecurities pledged as collateral for the accounting com- 
pan 3 r*s funded debt or short-term loans shall be included in accordance 
with the character of the securities pledged in accounts Nos. 706, 
707 or 729. 

Note B.— In stating the balance sheet in the annual reports to the 
Commission the total amount of the funds and the par value of 
securities issued or assumed by the accounting company and held in 
the funds shall be shown in the short columns, and the net amount of 
the funds (total amount less securities issued or assumed) shall be 
shown in the long column. 

712. LOANS AND BILLS RECEIVABLE. 

This account shall include the book value of all collectible obliga- 
tions in the form of demand or time loans and bills receivable, or 
other similar evidences (except interest coupons) of money receivable 
within a time not exceeding one year from date of issue. (See special 
instructions, section 7.) 

Note A. — ^This account does not include obligations which mature 
more than one year after date of issue, or demand or short-term 
notes held as investments includible in accounts Nos. 706 and 707. 

Note B. — Demand loans fully secured by stocks, bonds, or other 
marketable collateral shall be included in account No. 709, “Demand 
loans and deposits.” 

713. TRAFFIC AND CAR-SERVICE BALANCES RECEIVABLE. 

This account shall include the net amount receivable from other 
companies, against each of which there is a net debit balance in the 
total of the accounts representing interline freight, passenger, and 
baggage revenues, and charges for equipment interchanged on a per 
diem or a mileage basis. (See special instructions, section 7.) 

Note.*— The amount to be entered in this account is not the net 
balance between this account and account No. 759, “Traffic and car- 
service balances payable.” 

714. NET BALANCE RECEIVABLE FROM AGENTS AND CON- 

DUCTORS. 

This account shall include the net balance due in current accounts 
from agents, from train, sleeping car, and dining car conductors, 
and from train collectors, train auditors, porters, and other employees 
and representatives charged with the collection or custody of curr^t 
/ revenues* (See special instructions, section 7.) 



Appendix C 331 

Note. — Amounts advanced to general and special agents as working 
funds shall not be included in this account, but in account No. 72X), 

. “Working fund advances.” 

715. MISCELLANEOUS ACCOUNTS RECEIVABLE. 

This account shall include amounts due in audited accounts con- 
sidered good, such as those due from the United States or other 
Governments for the transportation of mails and Government property, 
and from express companies for express facilities furnished under 
contract; amounts due from other carriers on account of freight 
claims paid; miscellaneous bills against other railway companies, 
corporations, firms, and individuals, and other similar items. (See 
special instructions, section 7.) 

Note. — The amount to be entered in this account is not the net 
balance between this account and account No. 761, “Miscellaneous 
accounts payable.” 

716. MATERIAL AND SUPPLIES. 

This account shall include the balances representing the cost, less 
depreciation, if any, of all unapplied material, such as road and shop 
material, articles in process of manufacture by the accounting com- 
pany, fuel, stationery, and dining car and other supplies. In de- 
termining the cost of material and supplies suitable allowance shall 
be made for any discounts allowed in the purchase thereof. 

Note. — Balances representing the cost of unapplied construction 
material and supplies located at the point of use, which have been 
purchased for projected new roads and extensions, are provided for in 
road and equipment account No. 47, ‘Unapplied construction material 
and supplies.” 

717. INTEREST AND DIVIDENDS RECEIVABLE. 

This account shall include the amount of interest accrued to the 
date of the balance sheet on bonds owned and on loans made, the 
amount of dividends declared on stocks owned, and dividends accrued 
on such stocks when contracts require that the dividends be paid 
at stated times. (See special instructions, section 7.) 

Note A. — ^No amount representing interest or dividends receivable, 
shall be included in this account unless its payment is reasonably 
assured by past experience, anticipated provision, or otherwise. 

Note B. — No dividends or other returns on securities issued or 
assumed by the accounting company shall be included in this account. 

718. RENTS RECEIVABLE. 

This account shall include rents receivable accrued to the date of 
the balance sheet under leases and not includible iti account No. 715, ' 
“Miscellaneous accounts receivable.” It is not required that mkor 
rents shall be accounted for upon an accrual ;b^tsis. .($ee special 
■' -instructionsi section '7.) ^ r 



332 Analysis of Railroad Operations 

719. OTHER CURRENT ASSETS. 

This account shall include items of current assets not covered by 
accounts Nos. 708 to 718 inclusive. 

It shall include asset items that have not yet reached the stage of 
audited accounts and become classable in account No. 715, and yet 
have been advanced beyond the stage of accounts properly classable 
in account No. 722. (See special instructions, section 7.) 

720. WORKING FUND ADVANCES. 

This account shall include amounts advanced to general and special 
agents, and to other officers and employees, as working funds from 
which certain expenditures are to be made and accounted for. It 
also includes advances to fast freight lines and to demurrage and 
other bureaus. 

721. INSURANCE AND OTHER FUNDS. 

This account shall include the amount of cash and the ledger value 
of securities of other companies and other assets which are in the 
hands of trustees or managers of insurance, employees* pension, sav- 
ings, relief, hospital, and other funds which have been raised and 
specifically set aside or invested for specific purposes not provided for 
elsewhere; also the par value of securities issued or assumed by the 
accounting company and held in such funds. A separate account shall 
be kept for each fund. 

Note A. — Sinking funds and special deposits for the retirement 
of obligations are provided for in accounts No. 703 and No. 711, 
respectively. 

Note B. — In stating the balance sheet in the annual reports to the 
Commission the total amount of the funds and the par value of 
securities issued or assumed by the accounting company and held in 
the funds shall be shown in the short columns, and the net amount 
of the funds (total amount less securities issued or assumed) shall 
be shown in the long column. 

Note C. — ^This account shall not include funds held by the account- 
ing company solely as trustee and in which it has no beneficial 
interest. 

722. OTHER DEFERRED ASSETS. 

This account shall include items of deferred assets not covered by 
accounts No, 720 and No. 721. 

723. RENTS AND INSURANCE PREMIUMS PAID IN ADVANCE.. 

This account shall include the balances in the accounts representing 
prepaid rents chargeable to the appropriate rent accounts under In- 
come as the term is consumed for which the rents are paid; also 
insurance premiums paid in advance of their accrual, which premiums 
are to be apportioned and charged, as they accrue, to appropriate 
accounts. 



333 


Appendix C 

724 . DISCOUNT ON CAPITAL STOCK. 

This account shall include the total of the net debit balances in the 
discount and premium accounts for the several subclasses of capital 
stock. (See special instructions, section 2.) 

725. DISCOUNT ON FUNDED DEBT. 

This account shall include the total of the net debit balances in the 
discount, expense, and premium accounts for the several subclasses of 
funded debt. (See special instructions, section 3.) 

726. PROPERTY ABANDONED CHARGEABLE TO OPERATING 

EXPENSES. 

This account is intended as a suspense account, in which may 
be included amounts chargeable to Operating Expenses for fixed im- 
provements abandoned directly in connection with improvement or 
betterment work which are relatively large and the inclusion of which 
in the carrier’s accounts for a single year would seriously distort 
the accounts. It is to be used only after permission of the Interstate 
Commerce Commission has been asked and given. The carrier, in its 
application to the Commission, shall give full particulars concerning 
the property retired, the amount chargeable to Operating . Expenses, 
and the period over which, in its judgment, the amount of such 
charge should be distributed. 

For each item remaining at the close of the year in this account 
the accounting carrier shall indicate in its annual report to the Com- 
mission, with respect to each item of property abandoned, the period 
over which it is proposed to distribute the balance relating to the 
item, the date of the abandonment of the property, and the total 
amount originally to be charged to Operating Expenses. 

727. OTHER UNADJUSTED DEBITS. 

This account shall include the amount of debit balances in suspense 
accounts that can not be entirely cleared and disposed of until addi- 
tional information is received, such as freight claims paid when found 
to be correct, but in advance of investigation with other carriers; 
interest paid in advance; debit balances in clearing accounts, such as 
“Shop expenses,” “Store expenses,” “Operations of gravel pits,” and 
“Operations of quarries”; items credited to Operating Revenues or 
Operating Expenses on an estimated basis in accordance with general 
instructions for the classification of operating revenues and operating 
expenses, section 2; unextinguished discount on short-term notes; 
estimated accrued depreciation on equipment leased (see general in- 
structions, section 2) ; unadjusted debit items not provided for in 
accounts Nos. 724, 725, and 726, and other similar items. 

728. SECURITIES ISSUED OR ASSUMED---UNPLEDGED, : : 

This account shall include the par value of securilies . isstied by lie 
accotmtit^ conapany andl the par yalu^ . of securities issued Other 




334 Analysis of Railroad Operations 

companies and assumed by the accounjting company, that are held un- 
pledged in the company’s treasury or by its agents or trustees, ex- 
cept trustees of sinking or other similar funds. 

This account shall be divided into (a) Stocks, and (b) Bonds and 
other evidences of funded debt, each of which divisions shall be 
further so subdivided that in the company’s annual report to the Com- 
mission may be shown (1) amount nominally but not actually issued, 
and (2) amount nominally outstanding. 

Note A. — The term securities, as used in this account, includes all 
authorized certificates of stock and evidence of indebtedness which 
have been signed, sealed, and, when required, certified by the registrar 
or by the trustees under the mortgage or contract, and are not short- 
term securities. By short-term securities are meant those which are 
payable on demand or which mature not more than one year from 
date of issue. (See also Notes B to accounts Nos. 751 and 755.) 

Note B. — This account shall not include securities that are merely 
guaranteed. 

Note C. — This account shall not include any securities held in sink- 
ing and other reserve funds. 

Note D. — In the general balance-sheet statement the balance in this 
account shall be stated in the short column only. 

Note E. — When any securities have been actually issued to bona 
fide holders for value, or after issue by another company have been 
assumed by the accounting company, and after such issue or assump- 
tion are reacquired under circumstances which require that they 
shall not be treated as canceled or retired, they shall be included 
in this account at par value; the difference between the par value 
and the amount paid in reacquiring such securities shall be debited 
(or credited, as the case may be) to Profit and Loss. If such securities 
are subsequently pledged, they shall be included in account No. 729, 
“Securities issued or assumed — Pledged.” (See special instructions, 
sections 2 and 3.) 

729. SECURITIES ISSUED OR ASSUMED— PLEDGED. 

This account shall include the par value of that portion of securities 
pledged by the accounting company as collateral security for any of 
its funded debt or short-term loans, which consists of securities issued 
by the accounting company and securities issued by other companies, 
the obligation for payment of which has been assumed by the account- 
ing company. This account shall be subdivided into (a) Stocks, and 
(b) Bonds and other evidences of funded debt, each of which 
divisions shall be further so divided that in the company’s annual 
report to the Commission may be shown (1) the amount nominally 
but not actually issued, and (2) the amount nominally outstanding. 

Note A.— The term securities as used in this account includes all 
authorized certificates of stock and evidences of indebtedness which 
have been signed, sealed, and, when required, certified by the registrar 
or by the trustees under fee mortgage or contract, and are not 
short-term securities. By short-term securities Sitt meant those which 
are payable on denoiand or which mature not more than one year from 
date of issue. (See also Notes B to accounts Nos, 751 and 755;) . . 




Appendix C 335 

Note B.— This account ^all not include securities that are merely 
guaranteed. 

Note C. — ^This account shall not include securities which have been 
borrowed by the accounting company and pledged, nor any securities 
held in sinking and other reserve funds. 

Note D.— In the general balance-sheet statement the balance in this 
account shall be stated in the short column only. 

Note E.— The par value of securities issued or assumed and 
pledged for purposes other than that of security for funded debt or 
short-term loans shall be shown in account No, /03, “Sinking funds^'; 
No. 704, “Deposits in lieu of mortgaged propjerty sold,” No. 711, 
“Special deposits”; or No, 721, “Insurance and other funds,” as may 
be appropriate. 

Note F. — ^When any securities have been actually issued to bona 
fide holders for value, or after issue by another company have been 
assumed by the accounting company, and after such issue or assump- 
tion are reacquired under circumstances which require that they shall 
not be treated as canceled or retired, they shall be included in account 
No. 728, “Securities issued or assumed— Unpledged,” at par value; 
the difference between the par value and the amount paid in reac- 
quiring such securities shall be debited (or credited, as the case may 
be) to Profit and Loss. If such securities are subsequently pledged, 
they shall be included in this account. (See special instructions, sec- 
tions 2 and 3.) 

CREDITS. 

751. CAPITAL STOCK. 

This account shall include the total par value of certificates or 
receipts issued to represent permanent interests in the accounting com- 
pany, or interests which, if terminable, are so only at the option of the 
company. 

The amounts . included in this account shall be divided so as to 
show the par value of (1) certificates (pledged or unpledged) held 
in the company’s treasury, by its agents or trustees, or otherwise 
subject to its control, including both those reacquired after actual 
issue and those nominally but never actually issued; and (2) certificates 
issubd and actually outstanding, being those not held by the com- 
pany, its agents or trustees, or subject to its control. 

The amounts included herein shall be further divided so as to show 
the amount of each class of stock issued, as follows ; 

(a) Common stoc&. — Stocks which have no preference in distribu- 
tion of dividends. 

(b) Preferred stock. — Stocks having preference in distribution 
of dividends, 

(c) Debenture stock.— Stocks issued under a contract to pay a 
specified return at specified intervals. 

(d) Receipts outstanding for instai-lments paid.— Receipts for 

payments bn account of subscriptions to capital stock. eertifi- ■ 

cates are issued for amounts so paid, the par value sh^l be induded 



336 Analysis of Railroad Operations 

in the account covering the class stock for which the certificates 
are issued. 

Each of the above classes shall also be divided into subclasses 
according to differences in dividend or interest rights, voting rights, 
or conditions under which the securities may be retired. 

Note A. — When a general levy or assessment is made against the 
holders of capital stock, requiring the payment of any sum for the 
use of the company in addition to the consideration agreed upon at 
the time of sale, the amount collected upon such levy or assessment 
shall be credited to the discount and premium account for the subclass 
of stock on which the assessment is made. 

Note B.—For the purposes of the balance-sheet statement capital 
stock is considered to be nominally issued when certificates, are signed 
and sealed and placed with the proper officer for sale and delivery, 
or pledged, or otherwise placed in some special fund of the accounting 
company. It is considered to be actually issued when it has been sold 
to a bona fide purchaser for a valuable consideration, and such pur- 
chaser holds it free from all control by the accounting company. All 
capital stock actually issued and not reacquired and held by or for 
the accounting company is considered to be actually outstanding. If 
reacquired by or for the accounting company under such circum- 
stances as require it to be considered as held alive and not canceled 
or retired, it is considered to be nominally outstanding. 

Note C. — In^ the general balance-sheet statement the total capital 
stock included in the account shall be shown in the first short column. 
The amount nominally but not actually issued and . the amount 
nominally outstanding shall be shown in the second short column, 
and in the long column shall be shown the amount actually outstanding. 

752. STOCK LIABILITY FOR CONVERSION. 

This account shall include the company's liability under agreements 
to exchange its capital stock for the outstanding securities of com- 
panies whose physical property has been acquired under such agree- 
ments, but whose securities have not yet been surrendered for ex- 
change. 

753. PREMIUM ON CAPITAL STOCK. 

This account shall include the total of the net credit balances in 
the discount and premium accounts for the several subclasses of 
capital stock. (See special instructions, section 2.) 

754. GRANTS IN AID OF CONSTRUCTION. 

This account shall include the estimated money value at time of 
acquisition of land and other grants received from States, municipali- 
ties, and other public corporations as their contributions toward the 
construction or acquisition of property the cost of which is chargeable 
to investment in road and equipment. 

755. FUNDED DEBT UNMATURED. 

There shall be included in this account the total par value of un- 
taatured debt, maturing more than one year from date of issue, issued 



Appendix C 337 

by the accounting compaiay and not retired or canceled, and the 
total par value of similar unmatured debt of other companies, the 
payment of which has been assumed by the accounting company. 

The amounts included in this account shall be divided so as to show 
the par value of (1) certificates or other evidences of funded debt 
(pledged and unpledged) held in the company’s treasury, by its agents 
or trustees, or otherwise subject to its control, including both those 
reacquired after actual issue and those nominally but never actually 
issued; and (2) certificates or other evidences of funded debt issued 
and actually outstanding, being those not held by the company, its 
agents or trustees, or subject to its control. 

The amounts included herein shall be further divided so as to 
show the amount of each class of ftmded debt, as follows : 

(fl) Equipment obligations.— Equipment bonds, equipment notes, 
or car-trust notes secured only by lien on specific equipment. 

(fi) Mortgage bonds.— Bonds secured by lien on physical property 
and not includible in the other subdivisions of this account. 

(^) Collateral trust bonds. — ^Bonds and notes secured by a lien 
on securities or other negotiable paper; and stock trust certificates 
that are similar in character to collateral trust bonds. 

(d) Income bonds.— Bonds which are a lien on a carrier’s revenue 
alone, or bonds which, while being a Hen on its property and franchises, 
can claim payment of interest only in case interest is earned. 

{ e ) Miscellaneous obligations.— All funded obligations not pro- 
vided for by the other subdivisions of this account, also notes, tin- ' 
secured certificates of indebtedness, debenture bonds, plain bonds, real 
estate mortgages executed or assumed, and other similar obligations 
maturing more than one year after date of issue. 

(/) Receipts outstanding for funded debt.— Receipts for pay- 
ments on account of funded debt. When certificates are issued for 
amounts so paid, the par value shall be included in the account 
covering tlie class of funded debt for which the certificates are issued. . 

E^ch of the above classes shall also be divided into subclasses ac- , 
cording to differences in mortgage or other lien or security therefor, 
rate of interest, interest dates, or date of maturity. Par^ of any 
issue agreeing in other characteristics but maturing serially may be. 
treated as of the same subclass. 

Note A. — Securities maturing one year or less from date of issue 
shall be included in account No. 757, “Nonnegotiable debt to affiliated , 

, companies,” or No. 758, “Loans and bills payable,” except that where, 
an issue of securities maturing serially over a period of years contains 
short-term obligations such obligations may be included as funded 
debt. Matured funded debt shdl be included in account No. .754,- ' 
“Funded debt matured, unpaid.” 

Note B. — For the puiiposes of the balance-sheet statement funded 
. debt securities are considered to be nommlly: issued wto-certified by, 
trustees and placed, with the/proper ofi^der 




338 Analysis of Railroad Operations 

pledged, or otherwise placed in some ipecial fund of the accounting 
company. They are considered to be actually issued when they have 
been sold to a bona hde purchaser for a valuable consideration, 
and such purchaser holds them free from all control by the accounting 
company. All funded debt securities actually issued and not reac- 
quired and held by or for the accounting company are considered 
to be actually outstanding. If reacquired by or for the accounting 
company under such circumstances as require them to be considered 
as held alive and not canceled or retired, they are considered to be 
nominally outstanding. 

Note C. — Nonnegotiable notes having a maturity of more than 
one year after date of issue, held by affiliated companies, shall be 
included in account No. 757, “Nonnegotiable debt to affiliated com- 
panies.” 

Note D. — In the general balance-sheet statement the total unmatured 
funded debt included in the account shall be shown in the first short 
column. The amount nominally but not actually issued and the amount 
nominally outstanding shall be shown in the second short column, and 
in the long column shall be shown the amount actually outstanding. 

756. RECEIVER’S CERTIFICATES. 

When any receiver acting under the orders of a court is in posses- . 
sion of the property of the company and under the orders of such 
court issues evidences of indebtedness chargeable upon such property, 
the par value of such evidences shall be credited to this account 

757. NONNEGOTIABLE DEBT TO AFFILIATED COMPANIES. 

This account shall include the par value of nonnegotiable notes 
issued tp affiliated companiesj credit balances in open /accounts with 
such companies other than credit balances in current accounts classablle 
as current liabilities, and interest accrued on notes and open accounts 
included in this account, when such interest is not subject to current 
settlements. 

This account shall be divided : 

(a) Notes, including herein not only nonnegotiable notes that run 
longer than a term of one year, but also such notes payable on demand 
or within one year from the date of issue when it is mutually agreed 
that the notes shall not be enforced as current assets by the bolder. 

(b) Open accounts not subject to current settlement. 

(c) Interest accrued on amoimts included in this account when not 
subject to current settlements. 

Note A, — Accounts with affiliated companies which are subject to 
current settlements, such as traffic and car-service balances, charges 
for material and supplies currently furnished, charges for repairs to 
equipment, etc., shall be classed as current assets or current liabilities, 
as may be appropriate. 

Note B, — No item shall be included in this account which is not 
known to be the property of an affiliated company. 

Note C — The term agitated companies includes : 

1. Controlled companies, including companies solely controlled by 
the accounting company, and also companies jointly controlled by the 
accounting company and others under a joint arrangement 



Appendix C 339 

2. Controlling companies, including both companies solely con- 
trolling the accounting company, and companies which jointly control 
the accounting company under a joint arrangement. 

3. Companies controlled by controlled companies. 

4. Companies controlled by controlling companies. 

By control is meant the ability to determine the action of a corpora- 
tion. For the purposes of this account, the following are to be con- 
sidered forms of control: 

(a) Right through title to securities issued or assumed to exercise 
the major part of the voting power in the controlled corporation. 

(b) Right through agreement of some character or through some 
source other than title to securities, to name the majority of the board 
of directors, managers, or trustees of the controlled corporation. 

(c) Right to foreclose a first lien upon all or a major part in value 
of the tangible property of the controlled corporation. 

(d) Right to secure control in consequence of advances made for 
construction of the operating property of the controlled corporation. 

ie) Right to control only in a specific respect the action of the 
controlled coiporation. 

A leasehold interest in the property of a corporation is not to be 
classed as a form of control over the lessor corporation. 

Sole control is that which rests in one corporation. 

Joint control is that which rests in two or more corporations and 
which is held under a joint arrangement. 

758. LOANS AND BILLS PAYABLE. 

This account shall include the balances representing obligations out- 
standing in the form of loans and bills payable or other similar, 
evidences (except interest coupons) of indebtedness payable on de- 
mand or within a time not exceeding one year from date of issue. 

This account shall be kept in such form that the amounts of notes 
secured by collateral, payable within one year from date of issue, 
may be reported separately in the corporation's annual report to the 
Commission. 

Note, — ^This account shall not include obligations which mature 
more than one year after date of issue, or demand or short-term 
notes issued to affiliated companies and includible in account No. 757, 
“Nonnegotiable debt to affiliated companies.” 

759. TRAFFIC AND CAR-SERVICE BALANCES PAYABLE. 

This account shall include the net amount payable to other com- 
panies in favor of each of which there is a net credit balance in the 
total of the accounts representing interline freight, passenger, and 
baggie revenues, and charges for equipment interchanged on a per 
diem or a mileage basis. 

Note. — ^The amount to be entered in this account is not the bailee 
between this account and account No. 713, “Traffic and car-service 
balances receivable” 

760. AUDITED ACCOUNTS AND WAGES PAYABLE. 

This account shall include the amount of audited vouchers or ac- 
counts and audited payrolls tmpdd on date of ffie. ^1^ 




340 Analysis of Railroad Operations 

It shall include balances representing unclaimed wages and outstand- 
ing pay and time or discharge checks issued in payment of wages 
and all other unpaid vouchered items. 

761. MISCELLANEOUS ACCOUNTS PAYABLE. 

This account shall include outstanding drafts drawn by station 
agents, outstanding drafts drawn on the company in settlement of 
freight claims, conductors' refund and extra-fare checks not presented 
for redemption, deposits of afaliated companies subject to current 
settlement, unrefunded overcharges, and other items of the nature of 
demand liabilities not covered by accounts Nos. 758, 759, 760, 762, 
763, and 764. 

NoTE.--The amount to be reported under this account is not the net 
balance between this account and account No. 715, .^'Miscellaneous ac- 
counts receivable.” 

762. INTEREST MATURED UNPAID. 

This account shall include the amount of matured and unpaid in- 
terest on loans and on funded debt and receiver's certificates, issued 
or assumed by the accotmting company. 

Interest which matures on the first day following that for which 
the balance sheet is made shall be included in this account 

Note,— Interest matured unpaid on nonnegotiable debt to affiliated 
companies, if not subject to current settlement, shall be included in 
account No. 757, “Nonnegotiable debt to affiliated companies.” 

763. DIVIDENDS MATURED UNPAID. 

This account shall include the amount of dividends payable on 
capital stock but tmpaid, uncalled for, or unclaimed at the date of 
the balance sheet. 

Dividends which become payable on the first day following that for 
which the balance sheet is made shall be included in this account. 

764. FUNDED DEBT MATURED UNPAID. 

This account shall include the amount of funded debt matured and 
unpaid without any specific agreement for extension as to*^time of 
payment, including unpresented bonds drawn for redemption through 
the operation of sinking and redemption fund agreements, 

765. UNMATURED DIVIDENDS DECLARED. 

This account shall include dividends declared on capital stock, but 
not payable until after the first day following the date of the balance 
sheet 

766. UNMATURED INTEREST ACCRUED. 

This account shall include the amount of interest on loans and on 
funded debt and receiver's certificates issued or assumed, accrued to 
the date for which the balance sheet is made, but not payable uhtil 
after the first day following that date. 




I 


Appendix C '341 

767. UNMATURED RENTS ACCRUED. 

This account shall include rents, under leases or other agreements, 
accrued to the date for which the balance sheet is made, but not pay- 
able until after the first day following that date. It shall also in- 
clude the amount of accrued dividends on stock and accrued interest 
on the 'funded debt of other companies when such dividends and 
interest are payable by the accounting company as all or a portion of 
the rent under leases or other agreements with those companies. 

768. OTHER CURRENT LIABILITIES. 

This account shall include items of current liabilities not covered 
by accounts No. 758 to No. 767, inclusive. 

769. LIABILITY FOR PROVIDENT FUNDS. 

This account shall include the ledger balances representing the 
liability of the accounting carrier for the amount of the assets 
(whether contributed by the company, by the employees, or by others) 
in the hands of its treasurer or of trustees or managers acting for 
it in the administration of employees’ pension, savings, relief, hospital, 
and other association funds. 

Note A.— This account shall not include items representing funds 
in which the accounting company has no beneficial interest and which 
it holds purely as trustee. 

Note S. — ^In stating^ the balance sheet in the annual reports to the 
Cdmmission, the liability for provident funds which are carried in the 
current cash of the company shall be included under current liabilities, 
in account No. 76X, "Miscellaneous accounts payable.” 

770. OTHER DEFERRED LIABILITIES. 

This account shall include items of deferred liabilities not covered 
by account No. 769; such as retained percentages due contractors, 
to be paid on completion of contracts; deposits for construi^lon of 
side tracks, to be refunded on the basis of an agreed percentage of 
the earxiings from the traffic handled over the tracks; and other 
similar items, 

771. TAX LIABILITY, 

This account shall indude the amount of taxes accrued andi charged 
against income accounts No. 532, ’^Railway tax accruals”; No^ S3iS, 
"Taxes on miscellaneous operating property”; and No. 544, "Miscel- 
laneous tax accruals” in excess of the amount paid. 

If the taxes paid are m excess of the taxes accrued, the amount 
of th^ excess shall be shown in red in this account 

772. PREMIUM ON FUNDED DEBT. 

This account shall indude the total of ffie net cre<^ bab^s 
discount, expense, amd premium accot^ fdr^^t^^^^ 
classes of fiinded debt (See special instructibnsj sei^bn ^3^^^ 



342 Analysis of Railroad Operations 

773. INSURANCE AND CASUALTY RESERVES. 

This account shall include the net credit balance in the accounts 
to which are credited specific appropriations of income or surplus 
and such insurance premiums as are concurrently charged to Operating 
Expenses to cover self-carried risks on fire, fidelity, boiler, casualty, 
burglar, and other insurance, and to which are charged losses sus- 
tained on items protected by such insurance. 

774. OPERATING RESERVES. 

This account shall include the ledger balances representing reserves 
created by charges to Operating Expenses for maintenance of road 
and equipment, for personal injury, loss and damage, and other 
claims, and for similar purposes, such charges being made currently 
for the purpose of equalizing charges to operating accounts for the 
current accounting year. (See special instructions for operating ex- 
penses, sections 19 and 20.) 

Note A. — Debit balances in operating reserve accounts to be cleared 
by future charges to operating accounts shall be shown in red in this 
account in the carrier’s annual rej^ort to the Commission. 

Note B. — The credit balances in reserve accounts representing ap- 
propriations of income or surplus for sinking funds, etc., shall not 
be included in this account. 

Note C.— Accrued depreciation credit balances shall be included in 
accounts Nos. 775, 776, or 777, as may be appropriate. 

775. ACCRUED DEPRECIATION— ROAD. 

This account shall be credited with amounts charged to Operating 
Expenses or other accounts to cover the depreciation of fixed improve- 
ments, the cost of which is included in account No. 701, “Investment 
in road and equipment,” or in account No. 702, “Improvements on 
leased railway property.” 

When any fixed property is destroyed, sold, or otherwise retired 
from service, the amount included in this account with respect to 
the property retired shall be charged hereto. 

(Note carefully general instructions for the classification of in- 
vestment in road and equipment, sections 7, 8, 11.) • 

776. ACCRUED DEPRECIATION— EQUIPMENT. 

This account shall be credited with amounts charged to Operating 
Expenses or other accounts to cover the depreciation of the accounting 
company's equipment. 

When any equipment is destroyed, sold, or otherwise retired from 
service, the amount included in this account with respect to the prop- 
erty retired shall be charged hereto. (See text of road and equipment 
general account II, Equipment.) 

777. ACCRUED DEPRECIATION— MISCELLANEOUS PHYSICAL 

PROPERTY. 

This account shall be credited with amounts charged to income 
or other accounts to cover the depreciation of property the cost, of 



Appendix C 343 

which is included in account No. 70S, “Miscellaneous physical 
property.” ♦ 

When any miscellaneous physical property is destroyed, sold, or 
otherwise retired from service, the amount included in this account 
with respect to the property retired shall be charged hereto. 

778. OTHER UNADJUSTED CREDITS. 

This account shall include the amount of credit balances in sus- 
pense accounts that cannot be entirely cleared and disposed of until 
additional information is received, such as amounts realized from the 
sale of damaged, unclaimed, and over freight and held pending claim ; 
switching charges of other carriers collected and held awaiting bills 
from such carriers ; amounts received from the sale of mileage tickets, 
to be disposed of as mileage is honored by the accounting or other 
carriers; amounts received from sales of excess baggage scrip, to be 
disposed of as coupons are honored ; interchangeable mileage credential 
ticket redemption funds; revenue overcharges subject to refund; 
credit balances in clearing accounts such as “Shop expenses,” “Store 
expenses,” “Operating gravel pits,” and “Operating quarries”; items 
charged to Operating Revenues or Operating Expenses on an estimated 
basis in accordance with general instructions for the classification of 
operatmg revenues and operating expenses, section 2; estimated 
accrued depreciation on leased equipment (see general instructions, 
section 2) ; and other similar items. 

779. ADDITIONS TO PROPERTY THROUGH INCOME AND SUR- 

PLUS. 

This account shall include such amounts of income and surplus as 
have been definitely appropriated or set aside, and expended since 
June 30, 1907, in the acquisition of property the cost of which is 
included in property investment accounts other than those for securi- 
ties and also the amount of donations in aid of construction made by 
individuals and companies and not subject to distribution as dividends. 
Investments in road and equipment, in improvements on leased railway 
property, and in miscellaneous physical property shall be shown 
separately in the accounting company*s records. 

This account may also include amounts definitely appropriated or 
set aside, and expended prior to June 30, 1907. If such amounts are 
included, the account shall be kept in such form as to show separately 
amounts expended to June 30, 1907, and amounts expended since 
that date. 

Note. — ^Temporary appropriations of current funds for the acquisi- , 
tion of property, the cost of which is intended later to be met through 
an issue of securities, shall not be included in this account. 



I 


344 Analysis of Railroad Operations 

780. FUNDED DEBT RETIRED THROUGH INCOME AND SUR- 

PLUS, 

This account shall include the total amount of appropriated income 
and surplus expended in the discharge of the principal (less the dis- 
count, if any, suffered at the time of sale) of any funded debt issued 
or assumed by the accounting company and retired through sinking or 
other funds provided from income or surplus. The account shall be 
kept in such form as to show separately amounts expended to June 
30, 1907, and amounts expended since that date. 

Note A,— Temporary appropriations of current funds for the pay- 
ment of obligations which are intended to be replaced by new issues 
shall not be included in this account. 

Note B.— Amounts of appropriated income and surplus expended 
in retirement of trust obligations issued for the purchase of equipment 
shall be included in account No. 779, “Additions to property through 
income and surplus.” 

781. SINKING FUND RESERVES. 

This account shall include the net balances in accounts to which are 
credited definite appropriations of income and surplus whether held 
in general funds or specifically set aside in the hands of trustees for 
sinking and redemption funds. It shall also include income accretions 
to such funds retained therein. (See income account No, SS2, “In- 
come applied to sinking and other reserve funds.”) 

782. MISCELLANEOUS FUND RESERVES. 

This account shall include the net balances in accounts to which are 
credited definite appropriations of income and surplus specifically set 
aside in the hands of trustees and not provided for elsewhere. It 
shall also include income accretions to such funds retained therein, 
(See income account No. SS2, ‘Income applied to sinking and Other 
reserve funds.”) 

783. APPROPRIATED SURPLUS NOT SPECIFICALLY INVESTED. 

This account shall include the net balances in accounts to which are 
credited appropriations of income and surplus held in general ^uhds 
for definite purposes not provided for elsewhere, but for which no 
specific investment or segregation of assets has been made. 

784. PROHT AND LOSS-BALANCE. 

This account shall include the balance at the dose of the fiscal 
period as shown in the accounts provided in the classification of profit 
and loss accounts. 

FORM OF GENERAL BALANCE SHEET STATEMENT. 

ExBUANATORy NoTE.—Thc dassified form of general balance-sheet stato* 

ment is designed to show the financial conditicm of the accounting comply 

at any spedfied date. 



ASSET SIDE. 


Investments : % 

701. Investment in road and equipment 

702. Improvements on leased railway property. 

703. Sinking funds. 

Total book assets at date. (Jn short column,) 
Carrier’s own issues at date. (In short column,) 
Other assets at date. (In long column,) 

704. Deposits in lieu of mortgaged property sold. 

Total book assets at date. (In short column,) 

^ Carrier’s own issues at date. (In short column,) 

Other assets at date. (In long column.) 

705. Miscellaneous physical property. 

706. Investments in affiliated companies — 

(a) Stocks. 

(h) Bonds. 

(c) Not^s. 

(d) Advances. 

707. Other investments — 

(a) Stocks. 

(b) Bonds, 

(c) Notes. 

(d) Advances. 

(e) Miscellaneous. 

Total. 

CxjREENT Assets : 

708. Cash. 

709. Demand loans and deposits. 

710. Time drafts and deposits. 

711. Special deposits. 

Total book assets at date. (In short column,) 
Carrier’s own issues at date. (In short column,) 
m Other assets at date, (In long column,) 

712. Loans and bills receivable. 

713. Traffic and car-service balances receivable. 

714. Net balance receivable from agents and conductors. 

715. Miscellaneous accounts receivable. 

716. Material and supplies. 

717. Interest and dividends receivable. 

718. Rents receivable. 

719. Other current assets. 

Total 

DKmcRBD Assets : 

720. Working fun4 sdvsmces. 



r 


346 Analysis of Railroad Operations 

721. Insurance and other funds. 

Total book assets at date. (/i» short column.) 
Carrier’s own issues at date. (In short column.) 
Other assets at date. (In long column.) 

722. Other deferred assets. 

Total. 


Unadjusted Debits : 

723. Rents and insurance premiums paid in advance. 

724. Discount on capital stock. 

725. Discount on funded debt. 

726. Property abandoned chargeable to operating expenses. 

727. Other unadjusted debits. 

728. Securities issued or assumed— Unpledged. (In short column 

only.) 

729. Securities issued or assumed — Pledged. (In short column only.) 

Total. 


LIABILITY SIDE. 


Stock: 

751. Capital Stock- 

Book liability at date. (In short column.) 

Held by or for carrier at date. (In short column.) 
Actually outstanding at date. (In long column.) 

752. Stock liability for conversion. 

753. Premium on capital stock. 

Total. 


Governmental Grants : 

754. Grants in aid of construction. 


Long Term Debt: 

755. Funded debt unmatured — 

Book liability at date. (In short column.) 

Held by or for carrier at date. (In short column.) 
Actually outstanding at date. (In long column.) 

756. Receiver’s certificates. 

757. Nonnegotiable debt to affiliated companies — 

(a) Notes, 

(b) Open accounts. 

Total. 

Current Liabilities : 

758. Loans and bills payable. 

759. Traffic and car-service balances payable. 

760. Audited accounts and wages payable. 

761. Miscellaneous accounts payable. 



347 




Appendix C 

762. Interest matured unpaid. 

763. Dividends matured Unpaid. 

764. Funded debt matured unpaid. 

765. Unmatured dividends declared. 

766. Unmatured interest accrued. 

767. Unmatured rents accrued. 

768. Other current liabilities. 

Total. 

Deferbed Liabilities : 

769. Liability for provident funds. 

770. Other deferred liabilities. 

Total. 

Unadjusted Credits: 

771. Tax liability, 

772. Premium on funded debt. 

773. Insurance and casualty reserves. 

774. Operating reserves. 

775. Accrued depreciation — ^Road. 

776. Accrued depreciation — Equipment. 

777. Accrued depreciation — ^Miscellaneous physical property. 

778. Other unadjusted credits. 

Total. 

Corporate Surplus : 

779. Additions to property through income and surplus. 

780. Funded debt retired through income and surplus. 

781. Sinking fund reserves. 

782. Miscellaneous fund reserves. 

783. Appropriated surplus not specifically invested. 

Total appropriated surplus. 

784. Profit and loss— Balance. 

Total corporate surplus. 


m 



I 


348 Analysis of Railroad Operations 


SUPPLEMENTS 

OEDER OR DECEMBER 20, 1920 


At a SessioB of the INTERSTATE COMMERCE COMMISSIC 

Division 4, held at its office in Washington, D. C., on the 20th day 

December, A.D* 1920. 

Paragraph 9 of section 20 (a) of the Interstate Commerce Act (ad 
February 28, 1920), identifying as short-term notes those having matu: 
date two years or less from date of issue, being under consideration 
connection with the definition of short-term notes in the Classification 
Income, Profit and Loss, and General Balance Sheet Accounts for Stc 
Roads, effective July 1, 1914: 

It is ordered, That the provisions of the Classification of Income, Pr 
and Loss, and General Balance Sheet Accounts for Steam Roads, effeci 
July 1, 1914, are hereby modified so that notes having maturity date 1 
years or less from date of issue shall be considered short-term notes 
the purposes of accounting. References to short-term notes, in the folh 
ing accounts and instructions and elsewhere in the Qassification of Inco 
Profit and Ixiss, and Goieral Balance Sheet Accounts for Steam Ros 
effective July 1, 1914, are amended to conform to this rule; 

Special instructions, fourth paragraph of section 3 on page 40, 

Account No. 514, “Income from funded securities." Note A, 

Account No. 515, “Income from unfunded securities and accoimts.” 

Account No. 546, “Interest on funded debt.” 

Account No. 547, “Interest on unfunded debt," 

Account No. 706 (cL “Investments in affiliated companies — Notes.” 

Account No. 707 (c), “Other investments — Notes.” 

Account No. 712, “Loans and bills receivable,” and Note A thereto. 

Account No. 728, “Securities issued or assumed— Unpledged” ; Note 

Account No. 729, “Securities issued or assumed— Pledged” ; Note A. 

Account No. 755, “Funded debt unmatured.” Also in subdivision (e) 
that account and in Notes A and C thereto. 

Account No. 757 (a)j^**Nonnegotiable debt to affiliated companie 

Account No. 758, “Loans and bills payable,” and in the note to 1 
account. 

It is further ordered. That this order shall become effective on Janu 
1, 1921. 

By the Commission, Division 4: 

Gsorcs B, McGistty, 

Secretdr: 



Appendix C 


349 


ORDER OJ? MARCH 14, 1921 

At a Session of the INTERSTATE COMMERCE COMMISSION, 
Division 4, held at its office in Washington, D. C, on the 14th day of 
March, A, D. 1921. 

In the Matter of a Uniform System of Accounts to be Kept by Steam Roads. 

The matter of establishing the requirement that the accounts of carriers 
shall be written up and balanced monthly being under consideration : 

It is ordered, That the following instructions are hereby prescribed as 
section 3 of the general instructions on page 10 of the Classification of 
Income, Profit and Loss, and General Balance Sheet Accounts for Steam 
Roads, issue of 1914: 

3. Accounts shall be written up, posted to the general ledger and balanced 
monthly. The final entries for any month shall be made not later than 60 
days after the last day of the month for which the accounts are stated, 
except that the period within which the final entries for the month of 
December shall be made may be extended to such date in the following 
March as shall not interfere with the preparation and filing of annual re- 
ports as required by paragraph 2 of section 20 of the Interstate Commerce 
Act. 

It is father ordered. That this order shall become effective with the 
accounts for the month of January* 1921. 

By the Commission, Division 4. 

[seal.] George B. McGinty, 

Secretary* 



t 


350 Analysis of Railroad Operations 


ORDER OF AUGUST 19, 1921 


At a Session of the INTERSTATE COMMERCE COMMISSION, 

Division 4, held at its office in Washington, D. C., on the 19th day of 

August, A. D. 1921. 

The matter of providing in the Uniform System of Accounts for Steam 
Roads rules for accounting and reporting in connection with capital stock 
having no par value being under consideration : 

It is ordered, That the text of accounts 751, “Capital stock,” as it now 
appears in the Qassification of Income, Profit and Loss, and General 
Balance Sheet Accounts for Steam Roads, effective July 1, 1914, is hereby 
modified so that said text will read as follows : 

75L Capital Stock.— This account shall include the total value as herein 
provided of certificates or receipts issued to represent permanent interests 
in the accounting company, or interests which, if terminable, are so only 
at the option of the company. 

When such certificates or receipts have a par value they shall be included 
in this account at par value. 

When such certificates or receipts have no par value they shall be in- 
cluded in this account at the amount corresponding to the cash received, 
or the cash equivalent if the consideration is other than cash. This account 
shall also include amounts collected when a general levy or assessment is 
made against the holders of capital stock having no par value. 

The amounts included in this account shall be divided so as to show 
(1) the par value of certificates (pledged or unpledged) held in the com- 
pany’s treasury, by its agents or trustees, or otherwise subject to iU control, 
including both those reacquired after actual issue and those nominally but 
never actually issued ; and (2) the par value (or cash value of considera- 
tion received if without par value) of certificates issued and actually out- 
standing, being those not held by the company, its agents or trustees, or 
subject to its control. 

The amounts included herein shall be further divided so as to show the 
amount of each class of stock issued, separated as between par value and 
nonpar value stock, as follows : 

(o) Common stock . — Stocks which have no preference over other issues 
of stock in distribution of dividends or of assets. 

{b) Preferred stock . — Stocks having preference over other issues of 
stock in distribution of dividends or of assets. 





Appendix C 351 

(c) Debenture Stocks tissued under a contract to pay a specified 

return at specified intervals. 

(6) Receipts outstanding for installments pazd.— Receipts for payments 
on account of subscriptions to capital stock. When certificates are issued 
for amounts so paid, the par value (or cash value of consideration received 
if without par value) shall be included in the account covering the class 
of stock for which the certificates are issued. 

Each of the above classes shall also be divided into subclasses according 
to differences in dividend or interest rights, voting rights, or conditions 
under which the securities may be retired. 

Note A.— When a general levy or assessment is made against the holders 
of capital stock, requiring the payment of any sum for the use of the com- 
pany in addition to the consideration agreed upon at the time of sale, the 
amount collected upon such levy or assessment in connection with stock 
having par value shall be credited to the discount and premium account 
for the subclass of stock on which the assessment is made. 

Note B. — When stock having par value is exchanged for stock without 
par value, sums resting in the discount and premium account for the 
subclass of stock retired shall be cleared to this account to the extent of 
the premium or discount applicable to the shares retired. 

Note C— When stock having no par value is reacquired, this account 
shall be charged with the amount of the liability resting therein with respect 
to the reacquired stock. The amount thus charged shall be determined by 
a prorate of the proceeds realized from shares of the particular subclass 
of stock of which the shares reaccjuired are a part actually outstanding im- 
mediately prior to the reacquisition. The difference between the amount 
by which the liability in this account is thus reduced and the amount 
expended in reacquiring the stock shall be adjusted through profit-and-loss 
accounts 607, “Miscellaneous credits,” or 621, “Miscellaneous debits,” as 
may be appropriate. 

Note D. — For the purpose of the balance-sheet statement capital stock is 
considered to be nominally issued when certificates are signed and sealed 
and placed with the proper officer for sale and delivery, or pledged, or 
otherwise placed in some special fund of the accounting company. It is 
considered to be actually issued when it has been sold to a bona fide, 
purchaser for a valuable consideration, and sucli purchaser holds it free 
from alk control by the accounting company. All capital stock actually 
issued and not reacquired and held by or for the accounting company is 
considered to be actually outstanding. If reacquired by or for the account- 
ing company under such circumstances as require it to be considered as 
held alive and not canceled or retired, it is considered to be nominally 
outstanding. 

Note E. — ^With respect to capital stock issued with par value; In the 
general balance-sheet statement the total capital stodc included in the ac- 
count shall be shown in the first short column. The amount nominally but 
not actually issued and the amount nominally outstanding shall be shown 
in the second short column, and in the long column shall be shown the 
amount actually outstanding. 

Note F. — ^With respect to: capital stock issued without par value; Ah 
appropriate record shall be maintained of die number of shares nomnally \ 
issued, actually issued, actually outstanding, and nominally outstanding. 
The number of shares in each class shall be duly reported by the accounting 
company under appropriate schedules in its annual r^ort. /: 



f 


352 Analysis of Railroad Operations 

It is further ordered, That the following be added to the text of accounts 
728, "Securities issued or assumed— Unpledged,” and 729, ‘^Securities issued 
or assumed— Pledged,” as Notes F and G, respectively: 

Stock having no par value and classable either as nominally issued or 
nofmmlly outstanding shall be stated by number of shares and duly re- 
ported by the accounting company under appropriate schedules in its annual 
report (See Note F under account 751, “Capital stock.”) 

It is further ordered, That this order become efiFective on October 1, 1921. 

By the Commission, Division 4, 

[seal,] Georc® B. McGinty, 

Secretary, 



APPENDIX D 


CLASSIFICATION 

w 

TRAIN-MILES, LOCOMOTIVE-MILES 
AND CAR-MILES 

m 

STEAM ROADS 

PRESCRTBED BV THE 

INTERSTATE COMMERCE COMMISSION 

IN ACCORDANCE WITH SECTION 20 OF THE 
ACT TO REGULATE COMMERCE 


ISSUE OF 1914 


Effective on July i, 19x4 





354 Analysis of Railroad Operations 

CONTENTS^ 


Order of the Commission 355 

Introductory letter 356 

Teain-mile Accounts. 

Rules and definitions 357 

Transportation service : 

801. Freight-train miles 358 

802. Passenger-train miles 358 

803. Mixed-train miles 359 

804. Special-train miles 359 

Work service: 

805. Work-train miles 359 

Locomotxve-mile Accounts. 

Rules and definitions 361 

Transportation service— Line : 

811. Freight locomotive-miles 362 

812. Passenger locomotive-miles 362 

813. Mixed-train locomotive-miles 363 

814. Special locomotive-miles 363 

Transportation service— Switching: 

815. Train switching locomotive-miles 364 

811. Yard switching locomotive-miles 364 

Work service : 

817. Work service locomotive-miles 364 

Car-hile Accounts. 

Rules and definitions 365 

Transportation service: ^ 

821. Freight-train car-miles 365 

822. Passenger-train car-miles 365 

823. Mixed-train car-miles 366 

824. Special-train car-miles 366 

Work service: 

825. Work service car-miles 366 



355 


I 

i 

Appendix D 

ORDER. 

At a General Session of the INTERSTATE COMMERCE COMMIS- 
SION, held at its office in Washington, D. C., on the 19th day of May, 

A. D. 1914. 

The subject of a Uniform System of Accounts to be prescribed for and 
kept by carriers being under consideration, the following order was 
entered ; 

It is ordered. That the Classification of Train-miles, Locomotive-miles, 
and Car-miles for Steam Roads and the text pertaining thereto, embodied 
in printed form to be hereafter known as Issue of 1914, a copy of which 
is now before this Commission, be, and is hereby, approved; that a copy 
thereof duly authenticated by the Secretary of the Commission be filed 
in its archives, and a second copy thereof, in like manner authenticated, 
in the office of the Division of Carriers* Accounts; and that each of said 
copies so authenticated and filed shall be deemed an origmal record thereof. 

It is further ordered. That the said Classification with t^ text per- 
taining thereto be, and is hereby, prescribed for the use of carriers by 
rail (exclusive of electric railways) subject to the provisions of the Act 
to Regulate Commerce as amended, in the keeping and recording of their 
accounts for train-miles, locomotive-miles, and car-miles; that each and 
every such carrier and each and every receiver or operating trustee of any 
such carrier be required to keep all said accounts in conforinity therewith j 
and that a copy of the said issue be sent to each and every such carrier 
and to each and every receiver or operating trustee of any such carrier. 

It is further ordered, That in order to avoid destroying the basis of 
comparison with previous years, any such carrier or any rece^r or 
operating trustee of any such carrier tnay, during the twelve months 
ending Juxie 30, 1915, keep and maintain,, in addition to the aaid accounts 
hereby prescribed, such portion or portions of its present mileage accounts 
as may be deemed desirable by any such carrier or by any receiver or 
operating trustee thereof, for the purpose of such comparison ; or, during 
the same period, may maintain such groupings of the accounts hereby 
prescribed as may be desired for that purpose. 

It is further ordered, Th&tt unless otherwise ordered, any such car- 
rier or any receiver of operating trustee of any such carrier may keep 
any temporary or experimental n?ileage accounts the purpose of which 
shall be to develop the efficiency of operations: Provided, however, TkaX 
such temporary or experimental accounts shall not impair the integrity 
of any general or primary account hereby prescribed. 

It is further ordered. That July 1, 1914, be, and is hereby, fixed as tlie 
date bn which the said issue of the Classification of Train-miles, Locomo- 
tive-miles, and Car-miles shall become effective.. 

By the Commission. 

[SEAUJ Geobge B. McGuirTTr 



f 

0 

356 Analysis of Railroad Operations 


INTRODUCTORY LETTER. 


Interstate Commerce Commission, 
Division of Carriers’ Accounts, 
Washington, May ig, igi 4 . 

To Accounting Officers of Steam Railways : 

This Qassification of Train-miles, Locomotive-miles, and Car-miles su- 
persedes the Classification of Locomotive-miles, Car-miles, and Train-miles, 
First Issue, effective July 1, 1907. 

The rules and definitions in this classification have been considerably 
amplified for the purpose of securing more uniform accounting, and the 
importance of requiring all employees who are assigned to work in cdK? 
nection with accounting for such statistics to familiarize themselves thor- 
oughly with these rules and definitions is called to the attention of account- 
ing officers. 

It is provided that the miles of trains which are operated between 
terminals or stations to transport company freight shall be included as 
transportation service miles whenever statistics of ton-miles are kept. 

In this classification have been included a number of accounting provisions 
which were contained in accounting cases in Accoxmting Builetin No. 8, 
It will be the purpose in the next authoritative issue of accounting cases 
to exclude therefrom those cases which are now covered by the rules of 
this classification. 

In the preparation of the revision of the accounting rules contained in 
this and other classifications for steam roads, which are concurrently 
issued, the Commission has had the cooperation of a subcommittee of the 
Standing Committee on Corporate, Fiscal, and General Accounts of the 
Association of American Railway Accounting Officers. '' 

In all essential features the classification, as here issued, meets with the 
approval of the special committee of the American Railway Association, 
by which it has recently been reviewed. 

Fre0 W. Sweney, 

Chief Examiner of Accounts* 



357 



Appendix D 

TEXT PERTAINING TO TRAIN-MILE ACCOUNTS. 


RULES AND DEFINITIONS. 

1. A train is a unit of equipment, or a combination of units of equipment 
(exclusive of light locomotives), in condition for movement over tracks 
by self-contained motor equipment. A locomotive is a self-propelled unit 
of equipment designed solely for moving other equipment. A light 
locofnotive is a locomotive in condition for movement by its own motor 
equipment, uncoupled to cars, work equipment, or dead locomotives. A 
motor car is a self-propelled unit of equipment designed to carry freight 
or passenger traffic, and is not to be considered a locomotive. 

2. A trainr-mile is the movement of a train a distance, of 1 mile. 

3. In computing train-miles, fractions representing less than one-half 
nile shall be disregarded and other fractions considered as 1 mile. 

4. Transportation service train-miles shall be based on the actual dis- 
tance run between terminals and stations, and shall be computed from the 
official time-tables or distance tables. 

5. Work service train-mile shall be based on the actual distance run 
between terminals. When work trains are run between terminals and not 
ordered to work at some specified point or within specified working limits, 
the actual miles run shall be allowed to them, the same as to any other 
class of train. When ordered to run to a certain point to work at that 
point or within specified working limits, the actual miles made while 
under running orders shall be allowed, and in addition an arbitrary mileage 
of 6 miles per hour for the time working at the point or within the work- 
ing limits named. In computing such arbitrary mileage, fractions repre- 
senting less than one-half hour shall be disregarded and other fractions 
considered as one hour. Constructive miles on the basis of 6 miles per 
hour shall be allowed trains run for the purpose of removing snow when 
the aclaial miles of such trains are less than the constructive miles. No 
record is required of work-train miles on new roads, road extensions, or 
portions of such roads or extensions, before the commencement of the 
regular operation of revenue service trains, 

6. Each train and each section of a train run by a separate train creW 
shall be considered a separate train, whether hauled by one or more 
locomotives either the whole distance or a part of the distance between 
the train terminals. There shall be nothing added to this distaace to cover 
running of locomotives from enginehouses to terminals, doubling hills, run- 
ning for water, switching, or other work at way stations, or for the service 
of helper or pusher locomotives or of extra locomotives on double-head 
or triple-head trains. 

: 7. When the cai^rier*s trains, hauled by its loiwmotives and handled by 
its crews, are detoured over fot'eiga ^^ miles shall be computed 



$ 


358 Analysis of Railroad Operations 

on the basis of the miles actually run, and dassified by it in its train-miles 
in accordance with the service performed. 

8. Separate accounts of train-miles shall be kept for trains hauled by 
locomotives and for trains moved by motor cars. 

TRANSPORTATION SERVICE. 

This account shall include the miles of all revenue service trains, 
including trains which incidentally carry employees or company freight. 
It shall also include the miles of trains which are operated between 
terminals or stations to transport company freight, when the service 
is similar to that connected with the transportation of commercial 
freight and. statistics of ton-miles are kept. 

The trains here referred to are those the locomotive and train ex- 
penses of operating which are includible in the locomotive and train 
expense accounts in general account Transportation — ^Rail line. 

801. FREIGHT-TRAIN MILES. 

This account shall include miles run by all trains between terminals 
or stations for the transportation of revenue and company freight, 
when statistics of ton-miles are kept for the freight thus transported; 
also miles run by trains consisting of empty freight cars, and by 
trains consisting of a locomotive and caboose running light in con- 
nection with such service. 

Trains which regularly contain no passenger service equipment, but 
upon which passengers are transported in cabooses, or which contain 
occasionally a car devoted to passenger traffic, shall be classed as 
freight trains, as shall also trains temporarily using a passenger car 
in place of a caboose. 

Freight-train miles shall be subdivided as follows : 

Ordinahy freight-train miles.-— Miles run by trains consisting of 
a locomotive, with or without caboose, with odier equipment. 

Light freight-train miles.— Miles run by trains consisting of a 
locomotive and caboose, running light in connection with freight-train 
service. 

Note.— M iles run by trains regularly for the transportation of 
freight, which trains also regularly contain one or more cars devoted 
exclusively to passenger traffic, shall be classed as mixed-train miles. 

802, PASSENGER-TRAIN MILES. 

This account shall include miles run by revenue service trains 
to transport passengers, baggage, mail, milk, express, or any com- 
bination of these ; also miles run by trains cbnsistmg of deadhead 
passenger equipment When one or more cars other than regular 
passenger-train cars are hauled incidentally in a passenger, train, the 
miles run by that train shall be considered as pass^ger-train . miles; ; 





Appendix D 359 

Note A. — Miles run by trains regularly for the transportation of 
passenger traffic, which trains also regularly contain one or more 
cars devoted exclusively to freight traffic, shall be classed as mixed- 
train miles. 

Note B. — This account does not apply to trains run for the trans- 
portation of mail or milk upon the basis of authorized tariffs at rates 
based upon weight. The miles of such trains shall be classed as 
freight-train miles. 

803. MIXED-TRAIN MILES. 

This account shall include miles run by trains containing both 
freight-train cars moved, in connection with freight traffic, and pas- 
senger-train cars moved in connection with passenger traffic. 

Note A. — The incidental omission of either freight or passenger 
cars from a regularly scheduled mixed train shall not change its 
class as a mixed train. 

Note B. — ^The miles of freight trains which only incidentally con- 
tain a car devoted to passenger-train transportation service shall be 
classed as freight-train miles, and the miles of passenger trains which 
only incidentally contain cars moved in connection with freight trans- 
portation shall be classed as passenger-train miles. 

804. SPECIAL-TRAIN MILES. 

This account shall include miles run by revenue service trains 
which are paid for either on the basis of a rate per train-mile or a 
lump sum for the train ; such as circus and theatrical trains run under 
contracts calling for payment of specified amounts for transportation 
between designated stations, and chartered trains for the Federal or 
State Government carrying troops, munitions of war, camp outfits, 
etc. In case freight-train cars or passenger-train cars are used to 
complete a special train, the mileage made by that train shall still be 
considered as special-train miles. 

WORK SERVICE. 

805. WORK-TRAIN MILES. 

•This account shall include miles run by trains engaged in company 
service, such as official, inspection, and pay trains; inspection trains 
for railway commissioners for which no revenue is received; trains 
running special with fire apparatus to save the carrier’s property from 
destruction; trains run for transporting the carrier's employees to and 
from work when no transportation charge is made; wrecking trains; 
trains run for the purpose of ditdiing, filling embankments, and 
widening cuts; trains run for the purpose of removing snow; trains 
distributing ties, rails, other track material, ballast, bridge materi^, ^ 
and other material, and supplies for maintenance or for additions and 
betterments; trains run for picking up and concentrating snch 
;terial; and trains run for distrlbutii^ material and suppUes foir usd 




# 


360 


Analysis of Railroad Operations 

Note A. — ^The miles of trains running between terminals or stations 
for the transportation of company freight of which a record of ton- 
miles is kept, shall be included as freight-train miles or mixed- 
train miles, as may be appropriate. The expenses of operating such 
trains shall be included in the locomotive and train expense accounts 
in general account Transportation — Rail line. 

Note B. — The accounting for expenses of work-train service shall 
be in accordance with section 4 (c) of the general instructions of 
the classification of investment in road and equipment; section 3 (c) 
of the special instructions of the classification of operating expenses; 
or the texts of the several superintendence and general expense ac- 
counts in Operating Expenses, as may be appropriate. 

Note C, — No record is required of the miles of construction trains 
on new roads or road extensions, or on portions of such roads or 
extensions, before the commencement of the regular operation of 
revenue service trains. 



I 


Appendix D '361 

TEXT PERTAINING t6 LOCOMOTIVE-MILE ACCOUNTS. 


RULES AND DEFINITIONS. 


1. A locomotive is a self-propelled unit of equipment designed solely for 
moving other equipment. A locomotive-mile is a movement of a locomotive 
a distance of 1 mile, under its own power. 

2. In computing locomotive-miles fractions representing less than one- 
half mile shall be disregarded, and other fractions considered as 1 mile. 

3. All locomotive-miles made in hauling transportation service trains 
shall be based upon the actual distance run between terminals or stations, 
and shall be computed from the official time-tables or distance tables as 
prescribed for train-miles. 

4. Light-locomotive miles shall be based on the actual distance locomo- 
tives run, except that no light-locomotive miles shall be allowed for 
terminal service where the distance in one direction is less than one-half 
mile. 

5. Miles of locomotives in helper service shall be computed on the basis 
of actual distance run in such service. 

6. Train switching locomotive-miles shall be computed at the rate of 
6 miles per hour for the time actually engaged in such service. In com- 
puting such arbitrary mileage fractions representing less than one-half hour 
shall be disregarded and other fractions considered as one houn 

7. Yard switching locomotive-miles shall be computed at the rate of 6 
miles per hour for the time actually engaged in such service. In com- 
puting yard switching locomotive-miles, fractions representing less than 
one-half hour shall be disregarded, and other fractions considered as one 
hour. 

8. Work-train locomotive-miles shall be computed according to the rules 
prescribed for work-train miles. Miles of work locomotives employed 
in sw^ching at shops for shop purposes, spotting cars in gravel pits, work- 
ing with pile drivers, etc,, shall be computed upon the basis of 6 miles 
per hour for the actual time in the service. In computing the time en- 
gaged fractions representing less than one-half hour shall be disregarded 
and other fractions considered one hour. 

9. The miles of new or generally repaired locomotives running light in 
breaking-in service shall not be included in the locomotive-mile accounts. 

10. No record is required of the miles of locomotives in construction 
service on new roads or road extensions, or on portions of such roads or 
extensions, before the commencement of the regular operation of revenue 
service trains. 


11, A separate rewrd shall be kept for miles of steam locomotives and 
for miles of other locomotives. 

i2; Miles of motor cars shall not be dassed as locomotive-miles. 



362 Analysis of Railroad Operations 

TRANSPORTATION SERVICE— LINE. 

This account shall include the miles fun by locomotives moving 
transportation service trains, and also miles run light in connection 
with such service. 

811. FREIGHT LOCOMOTIVE-MILES. 

This account shall include miles run by locomotives in freight-train 
service. Such miles shall be subdivided as follows: 

Principal freight locomotive-miles. — Miles run by locomotives 
principal to the train, between terminals or stations, with freight 
trains; also miles run by locomotives between terminals or stations, 
with cabooses, going to or returning from such service; and miles 
run in hauling the second cut of freight trains doubled over grades. 

Helper freight locomotive-miles. — Miles run by locomotives as 
helpers over the division or that portion covered by the run, or on 
important grades, including double-headers, triple-headers, and push- 
ers, regardless of whether on the head end, in the middle, or on the 
rear of the train. 

Light freight locomotive-miles. — Miles run by locomotives light 
between terminals or stations in connection with freight- train service 
on account of unbalanced traffic; miles run light for hauling second 
cuts of trains doubled; miles run light between freight trains and 
next coaling station or water tank for coal or water; miles run 
light to pick up or assist freight trains between terminals ; miles run 
light by grade helpers in returning from assisting freight trains as 
pushers or double-headers ; and miles run light by locomotives coming 
from or going to enginehoiises or turntables from freight-train service. 

Note, — No miles shall be allowed for light movements at terminals 
if the distance between enginehouses or turntables and freight-train 
terminals is less than one-half mile, 

812. PASSENGER LOCOMOTIVE-MILES. 

This account shall include miles run by locomotives in passenger- 
train service. Such miles shall be subdivided as follows,: 

Principal passenger locomotive-miles.— Miles run by locomotives 
principal to the train between terminals or stations, with passenger 
trains. 

Helper passenger locomotive-miles. — Miles run by locomotives as 
helpers over the division, or that portion covered by the run, or on 
important grades. 

Light passenger locomotive-miles.— Miles run by locomotives 
light between terminals or stations on account of unbalanced trdfic, 
in connection with passenger-train service; miles run light between 
passenger trains and next coaling station or water tank for coal or 
water; miles run light to pick up or assist a passenger train be- 
tween terminals; miles run light by grade helpers in returning from 



% 

Appendix D 363 

assisting passenger trains^ as pushers or douhle-headers ; and miles 
run light by locomotives coming from or going to enginehouses or 
turntables from passenger-train service. 

Note. — N o miles shall be allowed for light movements at terminals 
if the distance between enginehouses or turntables and passenger- 
train terminals is less than one-half mile. 

813. MIXED-TRAIN LOCOMOTIVE-MILES. 

This account Shall include miles run by locomotives in mixed-train 
service. Such miles shall be subdivided as follows : 

Prin-cipaj. mixed locomotive-miles.— Miles run by locomotives 
principal to the train between terminals or stations, with mixed trains. 

Helper mixed locomotive-miles.— Miles run by locomotives as 
helpers over the division, or that portion covered by the run, or on 
important grades. 

Light mixed locomotive-miles.— Miles run by locomotives . light 
between terminals or stations on account of unbalanced traffic, in 
connection with mixed-train service; miles run light between mixed 
trains and next coaling station or water tank for coal or water; 
miles run light to pick up or assist a mixed train between terminals ; 
miles run light by grade helpers in returning from assisting mixed 
trains as pushers or double-headers; and miles run light by locomo- 
tives coming from or going to enginehouses or turntables from mixed- 
train service. 

Note.— N o miles shall be allowed for light, movements at terminals, 
if the distance between enginehouses. or turntables and mixed-train 
terminals is less than one-half mile. 

814. SPECIAL LOCOMOTIVE-MILES. 

This account shall include the actual miles run by locomotives in 
special-train service. This account shall Be subdivided as follows ; 

Principal special LocoMoriVE-MrtES.— Miles run by locomotives 
principal to the train between terminals or stations, with special trains. 

Helper special locomotive-miles.— Miles run by locomotives as 
heipers over the division, or that portion covered by the run, or on 
important grades. 

Light SPECIAL locomotive-miles.— Miles run by locomotives light 
between terminals or stations on account of unbalanced traffic, in con- 
nection with special-train service,*; miles run light between special 
trains and next coaling station or water tank for coal or water; 
miles run light to pick; ub or assist a special train between terminals; 
miles run light by grade helpers in returning from assisting sp^ial 
trains as pushers or double-headers; and miles run light by locomo- 
tives coming from or going to enginehouses or tu^tables frpm special- 
' train service; 

Note.— N n miles shall be allowed for l%ht movements at terminals 
if the distance between enMehouses or turntables and special-train 
terminals- is less than otte-hmf mil4 ; " 



* 


364 Andysis of Railroad Operations 

TRANSPORTATION SERVICE— SWITCHING. 

815. TRAIN SWITCHING LOCOMOTIVE-MILES. 

This account shall include miles allowed train locomotives for per- 
forming switching service at terminals and way stations. 

816. YARD SWITCHING LOCOMOTIVE-MILES. 

This account shall include miles allowed yard locomotives while 
switching in yards where regular switching service is maintained; 
also miles of switching locomotives running light between terminals 
and yards where regular switching service is maintained in connec- 
tion with switching service in such yards. This account shall be sub- 
divided as follows: 

Yard switching locomotive-miles—Freight.— Miles allowed yard 
locomotives in yards where regular switching service is maintained 
and in terminal switching and transfer service while engaged in 
switching cars in connection with the transportation of revenue freight; 
also miles allowed locomotives in such service while engaged inci- 
dentally in switching cars in connection with the transportation of com- 
pany freight. 

Yard switching locomotive-miles— Passenger.— Miles allowed 
yard locomotives while switching cars in connection with passenger- 
train service. 

Note. — ^Where yard switching is performed for both freight and 
passenger service by the same locomotive, or by locomotives assigned 
to one yard, a fair approximation of the mileage may be assigned 
to each service daily or monthly. 

WORK SERVICE. 

817. WORK SERVICE LOCOMOTIVE-MILES. 

This account shall include the actual miles run by locomotives in 
work-train service as defined in the classification of work-train miles ; 
also miles of locomotives engaged solely in shop or material yard 
switching service. r 

Note A. — Miles run by locomotives while engaged incidentally (in 
connection with regular yard switching service) in switching company 
material in company shop or material yards, or in switching equip- 
ment for repairs between yards and shops, shall be included in 
account * Yard switching locomotive-miles.” 

Note B.— -Miles run by locomotives engaged in shop and material 
yard switching service, if operated by shop employees, shall not be 
included in this account 



I 

Appendix D 365 

TEXT PERTAINING TO CAR-MILE ACCOUNTS, 

RULES AND DEFINITIONS. 

1. A car-mile is a movement of a unit of car eq^uipment a distance of 
[ mile. 

2. In computing car-miles, fractions representing less than one-half 
nile shall be disregarded, and other fractions considered as 1 mile. 

3. Separate accounts of car-miles shall be kept for the cars in trains 
lauled by locomotives and for the cars in trains moved by motor cars. 
The record of car-miles in trains moved by motor cars shall show 
leparately the miles for motor cars and for cars not thus equipped. 

rRANSPORTATION SERVICE. 

!21. FREIGHT-TRAIN CAR-MILES. 

This account shall include the actual miles run by freight and 
caboose cars in freight trains, or incidentally in passenger trains. 
Such car-miles shall be subdivided as follows; 

Loaded (run by loaded freight cars). 

Empty (run by empty freight cars). 

Caboose (run by caboose cars). 

22. PASSENGER.TRAIN CAR-MILES. 

This account shall include the actual miles run by pass^ger-train 
cars in passenger , trains and miles run by such cars incidentally in 
freight trains. This account shall include the miles of loaded cars 
and also of empty cars deadheaded in connection with the service, 
and shall be subdivided as follows: 

Passenger cars. — Miles run by all passenger cars, including com- 
bination passenger and baggage, passenger and mail, and passenger 
an4 express, chair cars, club cars, and other cars in which passengers 
are carried at regular tariff fares without extra charge for space 
occupied. 

Sleeping, parlor, and observation cars.— M iles run by sleeping, 
parlor, observation, and other cars for which an extra fare is charged, 
directly or indirectly, for space occupied. 

'Dining CARS,— Miles run by all dining, cafe, and other cars devoted 
exclusively to the serving of meals or other refreshments. 

Other passenger-train cars.— Miles run by all baggage, combina- 
tion baggage and express, and combinations of baggage^ mail, postal, 
and express cars, and by all m^, postal, milk, express, and btisiness 
cars. (This cfes ; includes no cars iiit^ded for the transportation 
■ , of passengers.). ; 



$ 


366 Analysis of Railroad Operations 

823. MIXED-TRAIN CAR-MILES. 

This account shall include the acttfel miles run by cars in mixed 
trains, as defined in the classification of train-miles. This account 
shall be subdivided as follows : 

Freight cars — Loaded. 

Freight cars— Empty. 

Caboose cars. 

Passenger cars. 

Sleeping, parlor, and observation cars. 

Dining cars. 

Other passenger-train cars. 

824. SPECIAL-TRAIN CAR-MILES. 

This account shall include miles run by cars in special trains, as 
defined in the classification of train-miles. This account shall be 
subdivided as follows: 

Freight cars— Loaded, 

Freight cars — ^Empty. 

Caboose cars. 

Passenger cars. 

Sleeping, parlor, and observation cars. 

Dining cars. 

Other passenger-train cars. 

WORK SERVICE. 

825. WORK SERVICE CAR-MILES. 

This account shall include miles run by cars in work trains, except 
by equipment which is designed exclusively for work service, such 
as snow plows, flangers, derricks, pile drivers, wrecking cranes, tool 
cars, and camp outfits. (For definition of work train see account 
No. 805.) 





APPENDIX E 


List of Schedules included in Annual Reports of Class I and II Railroads 
to the Interstate Commerce Commission in the order in 
which they appear in the report 

Schedule 

No, Description 

101 Identity of respondent. 

102 Directors, 

103 Principal general officers. 

104A Corporations controlled by respondent other than through title 
to securities. 

i04B Corporations indirectly controlled by respondent. 

108 Corporate control over respondent. 

109 Voting powers and elections (names of 20 principal stockholders), 

110 Guaranties and suretyships, 

200A Comparative general balance sheet — asset side. 

200L Comparative general balance sheet— liability side. 

211 Investment in road and equipment. 

21 IL Investment made during the year in additions and betterments 
on leased lines. 

21 IZ Memorandum of sectirities included in “Investment in road and 
. equipment.” 

211E Equipment installations, betterments and retirements made during ^ 
' • the year. - ' 

212 Miscellaneous physical proper^. 

214 Sinking funds. 

215 Deposits in lieu of mort^ged property sold. 

216 Special deposits. 

217 Investments in securities of non-carrier companies affiliated with 

respondent 

218 Investments in securities of carrier companies affiliated wiffi 
^ respondent 

219 Investments in securities of non-affiliated companies. 

219A Investments in securities made during the year. 

219B Investments in securities disposed of during the year, 

221 Securities and other intangibles owned or controlled through non- 

reporting subsidiaries. 

222 Stocks and long term debt of respondent retired or canceled dur- 

ing the year. 

220 Investment advances to other companies. 

223 Loans and bills receivable. 

228 Other unadjusted debits, 

230 U. S. (jovernment deferred assets and liabilities. 

233 U. S. Government unadjusted debits and credits. 

' 236 . Insurance and other funds. 

251 Capital stock. ^ 

251 A Fu^oses of issue and consideration received for stocks issued 
'during the’ year. 

" '■ ’ 0 r'. . , - ■ ■' 




Analysis of Railroad Operations 


368 

Schedule • 

JVa. Description 

252 Stock liability for conversion of securities of other companies. 
261 M Unmatured funded debt. 

261E Equipment obligations. 

261P Purposes of the issue and consideration received for funded debt 
issued or assumed during the year. 

262 Receivers' certificates. 

261 S Security for unmatured funded debt. 

263 Non-negotiable debt to affiliated companies. 

271 Loans and bills payable. 

275 Funded debt matured unpaid. 

286 Other unadjusted credits. 

285 Depreciation— road equipment and miscellaneous physical prop- 
erty. 

285A Bases of depreciation charges. 

287 Miscellaneous fund reserve. 

289 Appropriated surplus not specifically invested, 

300P Profit and loss account. 

300D Dividend appropriations. 

3001 Income account for the year. 

310 Railway operating revenues. 5 

330 Miscellaneous operations. 

320 Railway operating expenses (Gass I roads) by primary accounts 

divided between freight and passenger expenses. 

321 Railway operating expenses (Gass 11 roads) condensed classifica- 

tion. 

350 Taxes on railway property. 

371 Income from lease of road.^ 

371A Abstract of terms and conditions of leases. 

372 Miscellaneous rent income. 

373 Joint facilities maintained or operated by the respondent. 

374 Miscellaneous non-operating physical property. 

375 Separately operated properties — profit or loss, 

376 Recapitulation of hire of freight cars. 

381 * Joint facilities maintained or operated by other carriers. 

383 Rent for leased roads. 

383A Abstracts of leasehold contracts. 

384 Miscellaneous rents. 

391 Income and surplus applied to sinking and other reserve funds. 
393 Income and surplus appropriated for investment iii physical 
property, 

395 Miscellaneous appropriations of income and surplus. 

396 Miscellaneous items in profit and loss account for the year. 

411 Road operated at close of year. 

412 Miles of road at close of year by states and territories (single 

track) . 

413 Miscellaneous physical properties operated at the close of the year. 

414 Tracks, operated at close of year (for switthing and terminal 

companies only). 

415 Miles of track at close of year by states and territories (for 

switching and terminal companies only), 

417 Classification of respondent's locomotive, car and floating equip- 

ment. 

418 Electric locomotive equipment at close of year. 

419 Equipment (owned or leased) not hi service of respondent. 

420 Motor cars and trailers owned or leased. 




Appendix B 


369 


Schedule 

No, Description 

421 Motor trucks and automobile service operated at close of year. 

510 Gauge of track and weight of rail. 

511 Grade crossings, 

512 Telegraph and telephone lines, 

513 Ties laid in replacement and in betterment. 

514 Ties laid in additional tracks and in new lines and extensions. 

515 Rails laid in replacement and in betterment. 

516 Rails laid in additional tracks and in new lines and extensions. 

531 Statistics of rail line operations. 

532 Switching and terminal traffic and car statistics. 

541 Revenue freight carried during the year classified by commodities. 
561 Employees’ service and compensation; number of employees, 
amount of services rendered and compensation paid. 

571 Consumption of fuel by locomotives. 

S71A Statistics of fuel purchases and stocks. 

581 Contracts, agreements, etc. 

591 Changes during the year. 



APPENDIX F 

FREIGHT WAYBILL 

•w 240 -Erie Raiuroad Compaq V- 240 

I . PRciSHT WAVaiUv 











Appendix F 


% 


VAHOOTMiW TO BC nACCft III fiONSKCUTIVfC OROER BELOW 





APPENDIX G 


CONDUCTOR’S TRAIN REPORT 




rRCIOHT CONDUCTOR’S TRAIN REPORT 


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372 










Appendix G 


INSTRUCTIONS 

Fern Itils to b« issde out fey ytrtf derksii feefecs la^ fanes tofeafeiali 

Ccoductert to SU te etotloM sfeera eon an tdu 

Pana 133! to bs ouuie out by muSticton. 

Sn (has tesorta an pcffeetly lesHiIe. abnpbae, «fld aecsttto. 

Forwanl Reports urCar Service AssissuntJXew Haven, Cosa^ promptly after et^ trip ar day's ran. 

Sa tbe beadlay of the report vtlto the eatna of the tenainala fa fuO Oa tbs Uaa CGStfaic'l^h'* aiid‘'Am*vcdt''sivlae satiee 
Ifass tad date. belRg careful to ahoer "A, M.” and *?. M." 

Ei^be extreme care In takfag laltlala and numberi fnni cars to Trala Book and alwiB enuaenbfeg Iron Trab Book 
to Tf^l^itoart to avoid otnieslons, traaipoaitions and other errors. 

Place Aumbets of loaded and empty cars fa their pteper co1unuu»tvocanrnunibeis musC sot be ehom on »me Bse. 

Namea ol Conductor and Engineer muat be reported in full: as Jf. A. Smith, R. E. Jones^ etc 

NoiaformatioiiiiaskedforoA tbit report except that which is absolutely nccessscy, and all ioformatioa according to 
htadinga, must be given. 

When necessary to um two or nore sheets of tfaa lorn (or one tcaiti, fill in the headfapi tu caehaheet, nimherfag then 
waseeutiveiy. 

When netossaty to estliiaate tight waight of eats.,in the absence of steadied trefKlit, the {oCowing luifcnn snighta 
•3U te need: 


Oi! Tanks 


dM 


it 


d« 

Flat 

*"wood.,<, 


d« 

Flat 

Box 

"stcd...,^« 

17 


Box 



» 

Box 

Cool 

Coal 

Coal 

Cool 

Passenger 
Parlcr Biwt C 

" ated underfraaie. capacity 80.000 lbs. 

" wood, capacity 20 tons 



i 



Id 

** d-Afkarity 713 tnn* ^ 



" Combination and Baggage oars^ (wood). . . 

'amoasrta 


•« 



M 



II 



** 



*» 

Dead Engine aud Tender, 




Conductore most enter weight of car and lading in tons voder gross, also weight of-eippty care fa tons fa epaeo provided 
CTare). Contents of car under {Net}, tfa not use ditto marks for weighte. 

Do not vie ditto marks far SBiltage. Vae nilea and atatSoo symbols per T <8fi 

Conductors must show fa proper space oppnite ''ICfad of TVafa" whether "fsst.frei^lit,'' alow ^.'freight,” "heal 
to "faisceilaneous." 

"Fast Freight Ttaioa'' to conaht ol ’*t(me freight," "boat Cntght,” "piei treiglit" nod. "perishable freigbt" 

*%!ow Freight Trains" to eouist of cars not lequiriug fast movement. 

"Local Freigbt Traitu" to consist of pedi^r ears and pick up and set out tots. 

"Mixed Trains — Itegular Trdins Cpnjflit^ng ol Fastengcr and Freight, where the entlrei mvice is performed by one ctotn 
Such as between dAmston and Colchester* ' ' " ' 

Special care must be given to show gonreetlty on wheel reports under heading "Kind" ^Column (5)" the dedgnadon for 
ceh daas of ear handled, the following designntioos.to he used. 



A 




B 




V 




8P 

Stock— DD 


f?t^»rhifi'byrfa i - ' - 

, . M* 


PK ■ 

open top.-Gondola 


1 s V 

Rock.,,..,..,., 



H 

Tank....^ 

1 T 

Coke 

CK 

^Baltet.^.r 


Ftot 







% 


INDEX 


PAGE 

Accounting for material and supplies 8 

Accounting procedure 1 

Accounts 

Balance sheet 5, 7, 322 

Classification of (See Classification of accounts) 

Credit (See Credit accounts) 

Debit (See Debit accounts) 

General operating expense 42, 190 

General operating revenue 12 

General system of 5 

Income * ........5, ISO, 298 

Primary operating expense ..49, (50, 83, 92, 105, 133, 156, 201 

Primary operating revenue 13, 154, 176 

Profit and loss 5, 6, 316 

Accrued accoimting 7 

Additions and betterments 

Distinction between maintenance and additions and betterments 43 

'^Allied” services 15 

Statistics of 31 

B 

Balance sheet accounts 

Classification of 7, 290, 322 

Credits or liabilities : ; .7, 335 

Debits or assets ;7i 326 

Balance sheet statement >. ^ 7, 34S 


Classification of accounts 

Incoms^ profit and loss, and general balance sheet accounts 5, 7, 290 

Operating revenues and operating exposes of steam roads 5, 7, 169 

Qassification of locomotive and car repairs 90 

Qassification of passenger traffic .29, 36 

Qassification of revenue tons by commodities 22 

Classification of train miles, locomotive miles, and car mil^ for steam 

roads 114,353 

Conductor’s train report ^ 115, 372 

Credit accounts ^ 

Balance sheet 7, 335 

Income .5, 299 

Profit and loss , . ; . .6, 317 


Debit accounts . . 

Balance sheet .7, 326 

Income .5, 304 

V ■ 375 



76 


Index 


PAGE 

Profit and loss ^ 318 

deferred maintenance 51 

Effect on unit costs 76, 102 

►epreciation 47, 62, 84, 162, 165, 166 

distance carried 

Per passenger 30 

Per ton 26 

>istance tariff 25 

E 

Equalization of expenses 62, 87, 288 

Equation factors 68, 97 

equation of gross ton miles to reflect use of track 80 

Equation of track miles 79 

Equipment rents 136, 152, 299, 306 

Hire of Freight cars 11, 137, 299, 306 

Equipment repairs (See repairs) 

Excess baggage 15, 17, 178 

Expenses (See Railway operating expenses) 

Express service 16, 17, 179 

F 

^ixed charges 2, 140, 153 

formulae 

Combining percentages of change 34 

Dividing fluctuations in cost of fuel between price, tonnage handled, 

and rate of consumption 122 

Dividing fluctuations in labor and material between changes in rates 

of pay and prices of material 66, 70 

freight cars, hire of 11, 137, 299, 306 

l*’reight car repairs ...88, 92, 231 

?*reight rates 

Basis of 21 

Distance tariff 25 

?'reight revenue (Account 101) 14, 176 

Analysis of fluctuations in 32, 143 

[freight service ,^..13, 14 

Expenses separated from passenger service 57, 117 

i^reight traffic 

Classification of revenue tons by commodities 22 

Statistics of (See Statistics of freight traffic) 
freight waybill 27, 370 

G 

general operating expense accounts .42, 190 

General operating revenue accounts 12 

Ijross ton miles 25, 28, 126 

Sross ton miles per train hour 131 

H 

Hire of freight cars .11, 137^ 299, 306 



Index 


377 


I 

PACE 

Incidental revenues 18 

Income 

Miscellaneous operating 139, 150, 152 

Net 5, 8, 9, 151, 153 

Net railway operating 8, 9, 1S2 

Non operating ; 139, ISO, 152 

Outside 2, 139, 152 

Railway operating 11, ISO 

Income accounts 

Qassification of .5, 290 

Credits 5,299 

Debits 5, 304 

Income statement 5, 150, 152, 314 

Condensed form of 10 


Joint facility accounts 

General expenses 134, 160, 285 

Maintenance of equipment expenses 87, 158, 166, 241 

Maintenance of way and structures expenses 64, 157, 164, 225 

Rents ; 138, 152, 300, 307 

Revenues 12, 19, 155, 189 

Transportation expenses 107, 168, 256, 269 


L 

Locomotive repairs 84, 90, 100, 229, 230 


M 

Mail service 16, 17, 179 

Maintenance expenses 43 

Distinction between maintenance and additions and betterments 43 

Distinction between maint^ance and operation 44, 112 

Mainten5hce of equipment 

Analysis of fluctuations in 83 

Depreciation and retirements 47, 84, 165, 166 

Equalization of expenses 62, 87, 288 

Equijjment repairs 87 

Floating equipment repairs 101, 235 

Freight car repairs 88, 92, 231 

Joint facility accounts 87, 158, 166, 241 

Locomotive repairs 84, 90, 100, 229, 230 

Passenger car repairs 100, 232 

Primary accounts 83, 92, 158, 225 

Rearrangement of primary accounts 83, 146, 165 

Shop and power plant machinery— repairs and depreciation 86, 166 

Shop expense 88, 196 

Supervision and miscellaneous 8/ 

Unit costs (See unit costs— Maintenance of equipment) 

Work equipment repairs ^01 



r 


€ 


Index 


^faintenance of way and structures 

Analysis of fluctuations in 60 

Depreciation and retirements 47, 62, 162 

Equalization of expenses 62, 288 

Joint facility accounts 64, 157, 164, 225 

Primary accounts 49, 60, 156, 161, 201 

Rearrangement of primary accounts 60, 145, 161 

Repair accounts .61, 64 

fluctuations due to changes in rates of pay and prices of material. .66> 70 

Su^rvision and miscellaneous 62 

Unit costs (See unit costs — Maintenance of way and structures) 

Manhours — comparison with work performed 

Maintenance of equipment 89 

Maintenance of way and structures 70, 72 

Material and supplies 

Accounting for 8 

Causes of fluctuations 66, 89 

Store expense 65, 199 

Mileage 

Car ; 101, 114, 365 

Locomotive 114, 361 

Track 77 

Train 114, 357 


Net income 5, 8, 9, 151, 153 

Net railway operating income 8, 9, 152 

Net revenue from railway operations 11 

Nonrevenue freight 28 


O 


Operating Ratio 11, 52 

Ratio of train expenses to revenues 56 

Operation 45 

Distinction between maintenance and operation 44, 112 

Operations, Miscellaneous 45, 110 

Primary accounts .^110, 277 


P 


Parlor car service 

Passenger revenue (Account 102) 

Analysis of fluctuations in 

Passenger service 

Expenses separated from freight service 

Passenger rates 

Passenger traffic 

Gassification of 

Statistics of (See Statistics) 

Primary accounts 

Balance sheet 

Income 

Operating expense 

Operating revenue 

Profit md loss 



326 

ISO, 299 

49, 60, 83, 92, 105, 133, 1S6^ 201 

....13, IS? 176 

317 



Index 


379 


PAGE 

Profit and loss accounts 

Classification of 5, 6, 290, 316 

Credits 6, 317 

Debits 6, 318 

Profit and loss statement 6 


Railroad operations 

General character of 2 

Methods of analyzing 3 

Railway operating expenses 2, S, 41 

Analysis of fluctuations in SO, 60, 83, 104, 133, 143 

Classification 169 

General accounts 42, 190 

Primary accounts 49, 60, 83, 92, 105, 133, 156, 201 

Railway operating revenues * .2, 5, 12 

Analysis of fluctuations in 32, 143 

Classification of 169 

General accounts 12 

Primary accounts 13, 154, 176 

Rates (See Freight rates and Passenger rates) 

Rents 

Equipment rents 136, 152, 299, 306 

Hire of freight cars 11. 137, 299, 306 

Joint facility rents 138, 152, 300, 307 

Rent for leased roads . . ; 139, 300, 308 

Repairs 

Classification of locomotive and car repairs 90 

Maintenance of equipment 87 

Maintenance of way and structures .61, 64 

Running repairs ....90, 113 

Retirements 47, 164, 165 

Revenue passengers carried 30 

Revenue passenger miles 30 

Revenue per ton 26 

Revenue per ton mile 26 

Causes of fluctuations in 35 

Revenue per train mile 

Freight 37 

Passenger «... ^ 38 

Revenue tons carried 21 

Revenue ton miles 23 

Revenue train load 125 

Analysis of fluctuations in < 129 

s ■ 

Shop expense 88, 196 

Sleeping car service .15, 17, 179 

Sources of statistics 

Coaductoris train report ................115; 372 

Freight way bill . 3^ 

Stations and other facilities, operation of W, 167 

Statistics of ‘‘Allied** services - .i...... 31 



So 


Index 


PAGE 

atistics of freight traffic 

Nonrevenue freight 28 

Revenue tons carried 21 

Revenue ton miles 23 

atistics of locomotive and train operation 

Car miles 101, 114, 365 

Locomotive miles 114, 361 

Train miles 114, 357 

atistics of passenger traffic 

Revenue passengers carried 30 

Revenue passenger miles 30 

atistics of repair work performed 

Maintenance of equipment 89 

Maintenance of way and structures 70, 72 

ore expense 65, 199 

jpervision and miscellaneous expense 

Maintenance of equipment 87, 166 

Maintenance of way and structures 62, 164 

Transportation rail line ^....107, 168 


T 


axes 

Miscellaneous taxes 

Railway tax accruals 

raffic 

(See freight traffic and passenger traffic) 

Primary accounts 

Traffic expenses 

rain hours 

rain mile earnings (See revenue per train mile) 
ransportation— Rail line expenses 

Analysis of fluctuations in 

Character of expense 

Grouping of primary accounts 

Joint facility accounts 

Operation of stations and other facilities 

Supervision and miscellaneous 

Train and locomotive operation 

ransportation — rail line revenues 

“Allied” services 

Freight service 

Passenger service 

ransportation—Water line expenses 

ransportation — Water line revenues 

rack mileage 

ons carried 

Nonrevenue 

Revenue 

on miles 

Revenue 

Revenue and nonrevenue (net) 

Gross 

Locomotive 


135, 306, 309 
135, 304 


...134, 158, 242 
42, 45, 133, 148 
130, 131 


107, 147 

104 

105, 167 

107, 168, 256, 269 

107, 167 

fi)7, 168 

106, 167 

12, 176 

15 

13 

13 

109, 273 

17, 182 

77 

28 

21 

23 

2S 

25, 28, 126 

100 



Index 


381 


U 

^ PAGE 


Uncollectable railway revenues 136, 305 

Unit costs 

Effect of deferred maintenance on 76, 102 

General basis of 73 

Maintenance of equipment 99 

Floating equipment 101 

Freight cars 101 

Locomotives 100 

Passenger cars 101 

Work equipment 101 

Maintenance of way and structures 74 

Transportation 113 

Freight train operation 118 

Fuel performance 121 

Passenger train operation 124 

Yard locomotive operation 116 

W 

Waybill, freight 27, 370